It’s not just New York and California — the office market is getting healthier across the country.

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National office vacancy rates declined 10 basis points in the second quarter, with more than half of the 92 markets tracked by Cushman & Wakefield notching a dip in vacancy rates. The second-quarter results reinforced an uptick at the start of the year that has been building despite macroeconomic volatility. 

Vacancy has declined for two consecutive quarters as tenants fill the highest-quality buildings, leading some demand to trickle into the Class-A tier as the worst office space is being taken out of commission, with more than 90,000 apartments in the office-to-residential conversion pipeline. 

“The first half of 2026 reinforced that the office recovery is no longer confined to a handful of leading markets or trophy assets,” David Smith, the head of Americas insights at Cushman & Wakefield, said in a statement. 

Vacancy declined in 49 of the 92 markets tracked by Cushman, or 53% of cities. Tech firms building artificial intelligence tools continue to drive leasing activity, and the best-performing markets continue to be tech-centric hubs. San Francisco, Orange County and Midtown Manhattan recorded the largest year-over-year declines in vacancy, according to Cushman.

Other areas around New York City are well represented in the top 20 markets for vacancy declines, joined by secondary markets including Kansas City, Missouri; Charlotte; Jacksonville, Florida; Austin; and others. Many of the markets are bouncing back from cyclical vacancy highs, with San Francisco gaining 364 basis points of occupancy but leaving overall vacancy elevated at 30%. 

The wide representation of markets seeing vacancy dips suggests that office leasing activity is more broad-based and not solely reliant with tech tenants.

Total U.S. office inventory also contracted by 33M SF over the past five quarters, and 20 markets have had at least 1% of their office space taken off the market, as more conversions are proposed. 

Among markets moving in the other direction, vacancy climbed the most year-over-year in Cleveland, although the city’s vacancy rate is below the national average of 20.1%.

Boston, Oklahoma City, Puget Sound’s Eastside outside Seattle and Los Angeles’ central business district round out the five markets where vacancy has grown the most year-over-year. Boston’s vacancy rate is still below the national average, and neighborhoods outside Downtown Los Angeles have seen vacancy plateau over the last three quarters.

Tenants vacated a net 300K SF of space during the second quarter, but absorption for the rolling 12 quarters totaled 14.3M SF after revisions to previous quarters’ totals pushed move-ins higher and suggest that this quarter’s total could also shift upward.

Sublease availability has also declined 15% year-over-year to 96M SF, its lowest point since early 2021, and continuing a downward trend that Cushman says historically precedes a broader market recovery. 

More conversions will be announced, helping support gradual occupancy improvement across the sector as it benefits from healthier supply-side dynamics, Smith said. 

MBK Senior Living announced that construction has officially begun on a comprehensive renovation of The Bellettini, a senior living community in the heart of downtown Bellevue, Washington. The transformation is expected to be completed in Summer 2026.

The transformation will enhance key shared spaces throughout the community, including the lobby, concierge and valet areas, and signature dining venues. “This renovation reflects a deep respect for what The Bellettini has always been, while thoughtfully enhancing how it feels to live here each day,” said Brian Prouty, Executive Director of The Bellettini.

“We’re creating an environment that feels both elevated and comfortable—where residents can continue to enjoy the connections, experiences, and sense of ease they value, now within beautifully refreshed surroundings.”

The Bellettini features 144 independent and assisted living apartments. MBK Senior Living is a provider of independent living, assisted living, and memory care communities across the Western United States.

Data center REIT Digital Realty is looking to build a pair of large-scale campuses in Charlotte and Atlanta that together could total as much as 600 megawatts of capacity.

A Digital Realty data center in Northern Virginia

In Charlotte, Digital Realty filed plans last week for what would be North Carolina’s largest data center campus, GovTech reports. The 156-acre campus would house more than 3M SF of data center space across two buildings, with the two-phase project ultimately yielding as much as 400 megawatts of capacity. 

The Dallas-based data center giant acquired the site, located 12 miles west of downtown Charlotte at 12899 Moore’s Chapel Road, in November for $160M, according to the Charlotte Business Journal. The parcel is undeveloped but sits next to a major logistics complex used by Amazon. Rezoning approval from the Charlotte City Council will be required for the project to move forward as planned. 

Further expansion in Charlotte is likely to follow for Digital Realty, with the company’s leadership saying on its quarterly earnings call Thursday that the firm has acquired three additional parcels in the Queen City. One of those parcels is adjacent to the Moore’s Chapel Road site — a 48-acre property that the company acquired for $20M. 

The other two properties are adjacent to the company’s existing data center in the city — a 2-megawatt facility that the firm says it will expand to a 12-megawatt campus. The two downtown parcels were acquired for a combined $16M.

 In Georgia, Digital Realty plans to build a 200-megawatt campus on 97 acres in the Atlanta suburb of Forest Park, company leaders said on the earnings call. The vacant property was acquired last quarter from TPA Group for $120M, according to CoStar. Digital Realty already has three data centers in the Atlanta market: two in downtown Atlanta and one in nearby Douglas County.  

In addition to its land acquisitions and development plans, Digital Realty also revealed Thursday that it launched a $10B hyperscale-focused data center fund focused on U.S. markets. The fund, which raised $1.7B in the first closing, includes five operating properties and four development sites, with assets located in Northern Virginia, Dallas, Atlanta, Charlotte, New York and Northern California. 

Digital Realty’s development plans capped a strong first quarter for the REIT, which reported data center revenues up 7% year-over-year and a record leasing backlog of $919M. The firm’s development pipeline grew to 814 megawatts, 63% of which is already preleased. 

The $200 million plan to add significant new development to Birkdale Village has received a critical approval. The Charlotte Business Journal reports Jamestown received an okay from the Huntersville Board of Commissioners for a rezoning that will allow them to develop a 125-room hotel, 150 multifamily units, 26,715 square feet of retail space and a new, seven-story office building at the center.

Birkdale Village currently includes around 250,000 square feet of retail space, 50,000 square feet of office space and 320 apartments.

The new office building at Birkdale Village will total 175,000 square feet, including around 13,000 square feet of ground-floor retail space. The six-story apartment building is targeted for the site of the existing Dick’s Sporting Goods store. The seven-story hotel would be near Birkdale Village’s entrance off Sam Furr Road.

Large developments adjacent to a major sports venue have proven to be hugely successful. Bars, restaurants, retail and apartments now surround well over a dozen pro sports arenas and stadiums. Raleigh wants in on it.

The city received a rezoning request for the Raleigh Sports and Entertainment District detailing the $1 billion development plan around the former PNC Arena that’s being pushed by Carolina Hurricanes owner Tom Dundon. The Raleigh Business Journal reports the proposal calls for a site with four subdistricts holding 4,000 residential units, up to 3 million square feet of non-residential space, such as hotels, with building heights up to 40 stories, parking decks, open space, entertainment and dining areas as well as an enhanced tailgating experience.

The Entertainment subdistrict covers 27 acres and sits between the Lenovo Center and Carter-Finley Stadium. The rezoning is seeking 40-story heights for the 12-acre area along Edwards Mill Road.

Gale Force Sports and Entertainment, the parent company of the Carolina Hurricanes, is helming the project.

The project calls for a 20-story apartment building with 650 units, two 2-story buildings with 175,000 square feet of commercial space, and an up-to 12-story building with 200,000 square feet of office space and 250 hotel rooms (photo). The Atlanta Business Chronicle reports the development is eyed for 2800 and 2810 Spring Road in Smyrna near Truist Park, a site long targeted for a project. Rass Associates and 2800 Properties filed the permit request with the Developments of Regional Impact agency.

Developments of Regional Impact (DRIs) are large-scale developments that are likely to have regional effects beyond the local government jurisdiction in which they are located. These procedures provide a means of revealing and assessing the potential impacts of large-scale developments before conflicts relating to them arise. Local government autonomy is preserved since the host government maintains the authority to make the final decision on whether a proposed development will or will not go forward.

Charlotte-based The Providence Group completed four retail lease transactions totaling nearly 100,000 square feet across the Carolinas. The activity includes two transactions with HomeGoods, as well as additional deals with Homesense and T.J. Maxx. 

The Providence Groups Melissa McDonald, who represented the company in the transactions, added, “Competition for retail space is high, fueled by increased demand across the Carolinas as retailers seek space, whether in newly-built or redeveloped centers. Vacancies are being driven down and there is an overall lack of supply, which is causing rents to continue rising.” 

HomeGoods opened new stores at University Commons (22,000 square feet) in Greenville, NC and Beaufort Station (24,000 square feet) in Beaufort, SC. In a second deal at Beaufort Station (photo), T.J. Maxx has relocated within the market, signing on for 24,000 square feet.

Lastly, Homesense has opened a nearly 30,000-square-foot store at Sea Turtle Marketplace on Hilton Head Island.

Mall giant Simon plans an interior and exterior revitalization of the Houston Galleria. The Galleria is Texas’ largest and among the nation’s biggest shopping centers, offering over 2.4 million square feet of retail, dining, and amenities.

The multimillion-dollar upgrades will begin this summer and are expected to be complete by early 2025. Many of The Galleria’s interior and exterior entrances will evolve to include entryways. The revitalization also includes 155,000 square feet of modern new flooring throughout the center.

The newly announced revitalization follows the last major redevelopment of the property, which concluded in 2017. During that $30 million redevelopment, The Galleria’s luxury wing underwent extensive upgrades and added new top-tier retailers, as well as a renovated 200,000-square-foot Saks Fifth Avenue. Simon says the Galleria has invested several hundred million in upgrades since opening in 1970.

Inspired by the Galleria Vittorio Emanuele in Milan, Italy, the center features more than 400 stores, more than 60 eateries ranging from fine dining to fast casual; two high-rise Westin hotels and three office towers.

Crescent Communities’ Harmon Foxbank build-to-rent neighborhood on the outskirts of Charleston, South Carolina.

A major Southeast commercial real estate developer is teaming up with Chicago-based investment management firm Heitman to spearhead more than $200M in new single-family build-to-rent homes across four states.

Charlotte-based Crescent Communities and Heitman, along with an unnamed state pension fund, plan to start construction this spring on Harmon by Crescent Communities rental neighborhoods in North Carolina, Texas, Tennessee and Arizona, the company announced Thursday. 

The initial $235M investment will erect new three- and four-bedroom townhouses and single-family detached home communities full of amenities that will be offered for rent only, according to the press release.

“The expanding relationship with Heitman during a very challenging capital markets environment is a testament to this growing sector and the confidence in our brand,” Crescent Senior Managing Director Tony Chen said in the release.

Crescent is known for its Novel apartment brand and also develops and owns office, industrial and life sciences real estate. It first entered the build-to-rent category three years ago when it teamed up with Sumitomo Forestry’s DRB Group as its builder, with plans for communities in Atlanta, Charlotte, Raleigh and Charleston.

The Heitman partnership comes as build-to-rent is hitting a new peak. Developers unleashed 27,500 for-rent houses in 2023, 75% more than 2022, according to data compiled by RentCafe. More than 45,000 build-to-rent homes are underway in the U.S., with the bulk projected to deliver in 2025. Phoenix has the biggest pipeline with 4,000 units, followed by Dallas and Atlanta.

The industry is surging due to the high hurdle both prices and interest rates have placed on households to buy their own dwellings, along with the ongoing housing shortage. The build-to-rent platform gives households the space and features of single-family living without the capital outlay for maintenance and upkeep, industry experts say.

“We believe demand fundamentals for single-family rental housing will continue to grow at an attractive pace,” Brian Pieracci, head of North America private equity at Heitman, said in a statement. “Over the next decade, we expect a growing number of older millennials and retirees to rent as median home prices have grown at twice the pace of median incomes since 2000, making home purchasing less attainable and far less desirable.”

City officials have tapped Boyle Investment Co. to redevelop Gallatin’s downtown square and create a new city hall. Gallatin, a town of 45,000, is a half-hour drive from Nashville.

Plans for the proposed development, which will take over two city-owned blocks, include a “major brand” hotel, residential units, open green spaces and retail and restaurant space.

The Nashville Business Journal reports the project is expected to generate over $40 million in property tax revenue over 20 years and have a $261 million economic impact during its construction phase. It is also expected to create more than 300 permanent jobs in the city.

Memphis-based Boyle Investment Co. opened its Nashville office in 2001. It owns and manages almost 4 million square feet of office and retail space, as well as a projected five million square feet in the development and planning stages.

Boyle is responsible for Middle Tennessee developments including Berry Farms, McEwen Northside, Meridian Cool Springs and Capitol View.