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. 

Norway’s sovereign wealth fund is going local with its latest investment in U.S. real estate.

Norges Bank Investment Management invested $500M with Asana Partners to buy high-quality neighborhood retail assets, the Charlotte-based retail investment firm announced Tuesday. It is at least the second — and a relatively small — bet on U.S. retail real estate from Norges this year.

Asana Partners, which has more than $9B in assets under management, and Norges are creating a fund called Asana Partners Strategic Partners I to hold the investments. The strategic partnership is starting with a 50% stake in a portfolio of grocery-anchored retail centers but will also target unanchored centers, street retail and mixed-used assets for investment.

“Forming APSP I reflects our shared conviction in the strength and resilience of neighborhood retail real estate and expands our existing capability to capitalize on attractive investment opportunities across the country,” Asana partner Reed Kracke said in a statement.

Asana and Norges didn’t disclose the properties the sovereign wealth fund bought into and declined a request from Bisnow to provide additional details Tuesday morning. Asana’s portfolio spans 10.3M SF in 25 cities, according to its website.  

The partnership with Norges is running alongside Asana’s existing Asana Partners Select Fund, and Asana has acquired at least two assets separately since the start of the year. It paid $151M for a Huntington Beach, California, shopping center in February, the same month it cut a deal to acquire a 197K SF retail center called The Arboretum in Austin.

The investment comes after Norges announced a strategic pivot to diversify its real estate investments across sectors and geographies.

The manager of some $2.2T in assets as part of the Norwegian Government Pension Fund Global said in December that it would invest up to 7% of its capital in global real estate, with a focus on buying into platforms and funds. Norges is looking to hold a diversified portfolio spread across the globe, with 30% to 70% of its portfolio allocated to North America. 

The three-year strategic plan aims to create a more balanced portfolio after the firm told the Norwegian government in a November letter that its real estate investments had underperformed its equity and bond holdings. 

Norges has already been putting some of that capital into grocery-anchored retail. Last month, it partnered with TPG, PSP Investments, La Caisse and others to buy Echo Realty and its 230 retail centers across the Midwest and Southeast in a deal valued at around $2B. 

Grocery-anchored retail and other necessity-based asset classes have become popular investment targets for institutional capital, including a $1.6B fund launched in December by Bain Capital Real Estate and 11North.

Coming out of the pandemic, Dallas-Fort Worth was the No. 1 destination for corporate relocations by a wide margin, but in 2026, the competition is much fiercer, from within Texas and beyond. 

Several internal and external factors have site selectors thinking twice about automatically recommending DFW to their top-tier clients, including rising regional home prices, questions about Dallas’ office market and the rapid ascension of competing national markets. At the same time, more companies are opting to establish regional hubs instead of fully relocating to the metro.  

“DFW had record-shattering success a few years ago … but it’s difficult to sustain that type of success year after year after year,” said John Boyd Jr., principal of Florida-based corporate site selection specialist The Boyd Co.

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DFW has added more than 100 corporate headquarters since 2018, thanks to its business-friendly climate, growing population and land availability. The region now boasts more than 20 Fortune 500 companies, and its publicly traded firms have a combined market value of approximately $1.5T.

However, construction equipment manufacturer Caterpillar Inc.’s move to Irving in 2022 was the last Fortune 500 company to relocate its headquarters to DFW. 

Fierce Competition

DFW’s Fortune 500 relocation momentum has stalled just as markets like Miami, Charlotte and Phoenix have emerged as major contenders to DFW’s relocation throne. Those cities have their own growing talent pools, business-friendly environments and supportive infrastructures, according to a new CBRE report. 

Without new corporate tenants coming into the market, the future of DFW’s office sector begins to look murky. 

Corporate relocations and Y’all Street fueled the region’s trophy office market last year, but new trophy product is limited, and companies haven’t lined up to fill the 1M SF of office space in Whitacre Tower that will be left vacant when AT&T moves to Plano. 

Intrastate relocations have become more common than full corporate moves in recent years, as have companies establishing regional headquarters in North Texas, according to Mike Rosa, senior vice president of economic development at the Dallas Regional Chamber.

He cited Goldman Sachs’ 800K SF regional campus in Dallas and ScotiaBank’s 133K SF lease at Victory Commons One as examples of these regional hubs and what they bring to the metro. 

Across the country, corporate headquarters relocations grew by more than 70% from 2024 to 2025, according to CBRE. 

DFW nabbed 11 of the 164 headquarters relocations last year, the most of any city in the country. Seven companies also made intrastate moves to DFW, including some that consolidated operations to rightsize their footprints in the metro, according to CBRE.

The Miami metro was second in the nation, with eight new corporate headquarters in 2025, and it scored Palantir Technologies earlier this year. The Austin, Charlotte and New York metros were right behind Miami with seven new headquarters each. 

A North Texas highway

Some of those cities also received more support than DFW from site selectors surveyed this year about the best cities for corporate headquarters projects. After topping Site Selector magazine’s list of best cities for headquarters last year, Dallas fell to fourth this year, behind Nashville, Atlanta and Charlotte. 

Rising home prices in DFW have also made a move to the metro less attractive for corporate executives, who no longer get as much bang for their buck. Median listing prices for homes in DFW have risen more than 40% since the start of the pandemic, according to the Federal Reserve Bank of St. Louis. 

Winning Formula

With an abundance of undeveloped land, a pro-business climate and a diverse, educated workforce, Texas metros have been the biggest winners of corporate relocations for close to a decade. DFW gained the most new headquarters in the country during that time for those factors, as well as a high quality of life and affordability for businesses, JLL Executive Managing Director Bret Hefton said. 

The region’s favorable tax climate, with no state or local income taxes, is always attractive to companies.

“That’s a big factor when you’re talking to companies that are relocating or considering relocation from New York and California,” Hefton said.

He also praised the metro’s growth and central location in the U.S., which allows for easy transportation to anywhere in the country. 

DFW’s nearly 124,000 new residents made up the second-largest population increase in the nation for the 12 months that ended last July, according to Census Bureau data released last month. 

Booming markets in Collin, Denton and Kaufman counties continue to land major mixed-use projects and master-planned communities for those new residents because of their large swaths of undeveloped land.

The region’s growing population helps companies find workers when they relocate, as does its strong talent pipeline coming from a diverse range of educational institutions, said Mike Rosa, senior vice president of economic development at the Dallas Regional Chamber. 

The Dallas skyline

DFW is also unique for its diversified industries, which allow it to cast a wide net when trying to attract relocations. 

“Whereas Houston is very energy-driven and even though we’ve become more financial services-focused, we’re not nearly as dependent upon that industry as some other markets are with other industries,” Hefton said. 

Looking Ahead 

Many of the nation’s high-growth markets have seen skyrocketing home prices and costs of living, so DFW isn’t alone in struggling to score huge corporate relocations, Boyd said. Concerns about how artificial intelligence will affect real estate commitments in the years ahead have also prompted companies to favor intrastate moves and regional hub setups instead of full headquarters relocations. 

Companies are expected to continue picking DFW for secondary headquarters and regional hubs, but there will also be more full corporate relocations to the metro. 

“That’s what these decisions are based on — it comes to ‘where do we grow?'” Rosa said. 

Hefton said DFW remains a popular destination nationwide for companies considering a move. 

JLL has also engaged with several companies about possible relocations to DFW, but none have yet made full commitments. Still, Hefton said it is inevitable that DFW will see another major corporate relocation soon.  

“There’s a good chance that there will be an announcement in the next 12 months,” Hefton said.

The first three months of 2026 were the most active period for office landlords since before the pandemic.

Office tenants signed roughly 120M SF in new leases in the first quarter of the year, a 25% increase compared to the first quarter of 2025 and the highest quarterly total since 2018, according to a CoStar report.

The surge was largely driven by a higher volume of smaller leases — a trend that emerged after the pandemic. The number of leases signed hit its highest point going back a decade.

“While the quarterly figure signifies continued momentum for national office recovery, the composition of leasing activity reflects an intensification of patterns that have emerged in the leasing office market since the pandemic began,” CoStar National Director of Office Analytics Phil Mobley wrote in the analysis.

Since the beginning of 2023, new lease sizes remained about 15% below pre-pandemic averages, due in part to restricted hiring and the lack of larger space in newer buildings, according to the report.

Smaller leases also tend to be more fluid with shorter terms, promoting more leasing activity.

Amid the surge, almost half of the nation’s largest office markets have had leasing return within 10% of their pre-pandemic averages — primarily led by Charlotte, New York City, Miami and San Francisco, which are above their 2015 to 2019 averages.

Courtesy of CoStar Group

The demand from banks and financial institutions, which have maintained a higher in-office attendance record, has uplifted leasing recovery. That trend is particularly strong in Charlotte, where Citigroup, JPMorgan Chase and Sumitomo Mitsui Banking Corp. have all announced significant expansions.

But there are still a handful of metropolitan areas — including Atlanta, Washington, D.C., Chicago, Denver, Seattle, San Diego and Philadelphia — that are still below 20% of their pre-pandemic average of office leasing activity.

Looking forward, the first quarter’s momentum may not be sustainable through 2026 amid economic and uncertainty pressures, Mobley wrote.

“On the demand side, the return-to-office movement is reaching its apogee, and job growth remains tepid,” he wrote. “Rising energy costs associated with the conflict with Iran also present a headwind to economic growth and, in turn, to demand for office space.”

Charlotte and Raleigh have emerged as the top two retail markets in the country, according to Marcus & Millichap’s 2026 Retail Investment Forecast Report published March 12.

The report weighs a mixture of forward-looking economic indicators and supply-and-demand variables over a 12-month period. 

Nationwide, the retail sector exhibited resiliency in 2025, with a rise in vacancy in the first half of the year followed by surging demand to finish the year strong, the report stated. 

Charlotte ended the year with accelerating net absorption while holding one of the 10 lowest vacancy rates among major markets, according to the report. Momentum in the city was driven by big-box, single-tenant move-ins. Those included new leases by supermarkets such as Publix, Harris Teeter and Lowes Foods.

Andrew Margulies, Marcus & Millichap’s senior managing director of investments for the Carolinas, told Bisnow that soft goods discount chains like T.J. Maxx, Marshalls and Burlington were also key drivers of positive retail activity in Charlotte, reflecting the budget-consciousness of many consumers.

“That category has really excelled over the past five to seven years in terms of new store accounts, fewer store closures, actually just adding more stores and absorbing more space,” Margulies said. 

The metro area experienced slowing construction and growing net absorption, combining for a 3.5% vacancy rate. That’s 40 basis points under the city’s trailing 10-year average, according to the report.

Raleigh-Durham actually weathered the departures of several notable big-box retailers, and its positive retail fundamentals were driven by small-shop demand. A rise in completed projects in Raleigh-Durham helped vacancy to tick up slightly to 3.0%, but that still ranked second-lowest among major U.S. markets. 

Marcus & Millichap’s report noted that years of “robust in-migration and household formation” have supported significant demand for retail space throughout the Southeast. Margulies said there is almost unlimited appetite right now for well-located retail centers in both Charlotte and Raleigh, putting upward pressure on pricing. 

“In some cases for the same asset that may have sold 12 months ago at one price, today actually could be worth more just from cap rate compression,” he said.

As office vacancy remains high after boom years in the state and the region still working off a glut of multifamily overbuilding, retail has become the coveted asset class in the area, Margulies said. 

“From a financing perspective, it is one of the most coveted asset classes for investing and commercial real estate,” he said. “If you lose a tenant in a building, you sometimes have two, three, four, five, six options of other tenants you could backfill the space with.”

Private equity investment is gobbling up an increasing share of apartment units, now accounting for at least a tenth of all ownership in the United States, with most of it concentrated in the Sun Belt region.

Multifamily Apartment Building

Private equity firms own about 8,200 apartment buildings comprised of over 2.2 million units, according to a Private Equity Stakeholder Project report. Of the 121 big private equity firms PESP tracked, the 10 largest apartment owners collectively share 41% of them, a total of 900,000 units across the country.

Blackstone is the largest private equity owner of apartments in the U.S. with over 230,000 units. Greystar follows with 138,000 units. Other major firms owning vast swaths of units include Starwood Capital, Related Cos., Cortland and Brookfield.

Sixty-two percent of these units, or 1.4 million, were purchased since 2018, and almost 930,000 since 2021.

Blackstone picked up 58% of its units in or after 2021, and more than 75% were acquired since 2018. Starwood bought 53% of its portfolio in or after 2021 and 77% since 2018.

More than half of all units are located in five states: Texas, Florida, California, Georgia and North Carolina. Texas has the largest share of private equity-owned units at over 440,000 units across 1,500 properties.

Four of the top five — Texas, Florida, Georgia and North Carolina — also saw the largest population growth from 2020 to 2024.

The top 10 metropolitan areas with the largest private equity investment are Dallas; Atlanta; Houston; Denver; Austin; Phoenix; Orlando, Florida; Charlotte and Raleigh, North Carolina; and Tampa, Florida.

Those metros are home to 860,000 units owned by private equity, with Dallas seeing the largest share at 191,431 units and 598 properties, followed by Atlanta, where private equity owns 141,500 units and 466 properties.

The report also tracked the cost-burden impact of the private equity sector on these markets.

The Tampa, Florida, metro, where 23.4% of apartments are owned by private equity, saw a 20.8% increase in households spending 30% or more of their income on housing between 2019 and 2023. The percentage of households exceeding that spending figure rose from 53% to 64% over those four years.

Los Angeles-based fast fashion retailer F21 Opco, the licensee of Forever 21 in the U.S., said it will wind down its U.S. businesses while pursuing a going concern transaction or a sale of some or all of its assets. The company has filed for Chapter 11 protection in U.S. Bankruptcy Court for the District of Delaware, its second filing in six years.

“While we have evaluated all options to best position the company for the future, we have been unable to find a sustainable path forward, given competition from foreign fast fashion companies, which have been able to take advantage of the de minimis exemption to undercut our brand on pricing and margin, as well as rising costs, economic challenges impacting our core customers, and evolving consumer trends,” said F21 OpCo CFO Brad Sell. “As we move through the process, we will work diligently to minimize the impact on our employees, customers, vendors and other stakeholders.”

All stores will remain open while the bankruptcy process runs its course. In the event of a successful sale, the company may pivot away from a full wind-down of operations to facilitate a going-concern transaction.

The Chapter 11 filing does not affect Forever 21 stores outside the U.S., which are operated by other licensees. Additional information about bankruptcy proceedings may be accessed here.

Provident Data Centers and American Real Estate Partners’ PowerHouse Data Centers have formed a joint venture to build a data center campus near Dallas slated to be one of the largest such complexes in the United States.

Provident and AREP’s PowerHouse Data Centers plan to build the hyperscale-focused campus on 768 acres between Dallas and Fort Worth in Grand Prairie, Texas. The multi-phase project will initially leverage about 500 megawatts of committed power, with the potential to scale up to 1.8 gigawatts at full build-out, according to Provident.

Construction on the site — which sits north of Route 67 and close to Google’s data center complex in neighboring Midlothian, Texas — is set to begin in the second quarter of 2025, with power delivery secured for May 2026. While neither party in the joint venture shared their total investment in the project, Provident touted at least $5B in direct construction impact over the course of the multi-year build-out. 

The nearly 2 gigawatts of capacity planned for Grand Prairie would place the campus among the largest in both the booming DFW data center market and nationally, even as the data center sector is increasingly dominated by massive projects serving tech giants like Amazon, Microsoft, Google and Meta.  

“We were motivated to form this partnership due to Provident’s extensive experience in large-scale infrastructure and deep Texas roots, combined with PowerHouse’s focus on hyperscale solutions,” Provident Principal Strategist Jack Backes said in an email to Bisnow. “This created a partnership uniquely positioned to deliver a facility that meets the growing needs of global hyperscalers with speed, scalability, and efficiency.”

The JV between Provident and PowerHouse brings together two firms pursuing aggressive growth in the hyperscale data center market.  

Dallas-based Provident’s data center footprint entails 50 buildings in six states, totaling 3.8 gigawatts of power. The firm’s portfolio is centered in Texas, with data centers in operation or being developed in seven cities across the state, according to the company’s website. 

Development plans include a seven-building data center campus in Burns Harbor, Indiana, which Provident first proposed in August. But Backes tells Bisnow its latest Texas project previews an upcoming push to expand its presence in the market, targeting the world’s largest tech firms.  

“This project is also part of Provident’s broader vision for hyperscale growth,” Backes said. “Provident is preparing to leverage its 30 years of experience to deliver future developments independently through vertical construction in the data center space.”

PowerHouse’s hyperscale expansion is already well underway. The Virginia-based company says it has 87 buildings and 25.5M SF in planning underway or completed, representing over 5.9 gigawatts of power across 6 U.S. markets. 

As with the planned campus in Grand Prairie, PowerHouse’s swollen development pipeline is being executed largely through joint ventures. 

The largest of these JVs, announced in August, is a partnership with fellow data center firm Chirisa and asset manager Blue Owl to build a series of data centers anchored by AI cloud provider CoreWeave that could ultimately deploy more than $5B. The JV’s initial buildout is slated for a campus near Richmond, Virginia, that could ultimately exceed a gigawatt of capacity, with further development expected in New Jersey, Pennsylvania, Texas, Kentucky and Nevada. 

Less than a month later, PowerHouse unveiled a separate JV with investment management firm Town Lane. The partnership acquired a 122-acre site in Charlotte, North Carolina, where it plans to offer 300 megawatts of capacity across five buildings by 2027. 

An earlier development joint venture between AREP and investment firm Harrison Street formed in late 2021 has also fueled much of PowerHouse’s growth trajectory. This year, the two firms broke ground on both the first phase of an 800-megawatt campus in Spotsylvania County, Virginia, and a 65-megawatt project in Reno, Nevada. The partners sold one of their co-developed data centers in Northern Virginia to CyrusOne last month.

The JV with Harrison Street has helped PowerHouse push into the DFW market, launching a 200-megawatt project on 50 acres in Irving, TX last spring.  

Amid a nationwide data center development boom, the DFW metroplex has remained one of the industry’s strongest growth markets. The region trails only Northern Virginia in leased critical IT Power with 776 megawatts, according to 451 Research. At the end of the second quarter of last year, JLL reported that Dallas ranked fourth in capacity planned or under construction with a pipeline exceeding 3000 megawatts. 

The data center industry’s growth across Texas has sparked growing concerns about the impact of gigawatt-scale campuses on the stability of the ERCOT power grid and power prices for consumers, with some politicians suggesting pumping the breaks on future development. But Provident’s Backes insists that the company’s project with PowerHouse in Grand Prairie is paired with energy infrastructure investments that, along with collaboration with utilities, will ensure these concerns don’t come to fruition.

“Our development is designed to enhance grid stability rather than strain it,” Backes said. “Provident has spent the past two years working closely with ERCOT and Oncor ensuring that the project not only avoids price increases for consumers but also strengthens grid resilience and reliability.”

DAZN, a global sports streaming service, has leased the entire 14th floor at SJP Properties’ 470 Park Ave. South for its U.S. corporate office. Terms of the long-term lease were not disclosed.

“DAZN is extremely excited to be relocating in New York City into the 470 Park Avenue property,” said Grant Sprigings, head of property & facilities at DAZN Group. “We visited many locations during our time exploring a new office location and felt 470 Park Ave. South provided the perfect blend of location, facilities, and amenities. The office space is high-end and modern with an external terrace that will allow DAZN to host partner events throughout the year.”

Nicholas Farmakis and John A. Johnson, Jr. of Savills represented DAZN, while SJP Properties was represented by the CBRE team of vice chairmen Paul J. Amrich and Neil V. King III, SVP James Ackerson and senior associate Josh Pernice.

U.S. banks reported a 20% sequential increase in total high-volatility commercial real estate (HVCRE) loans in the second quarter of 2024 following a four-year low balance in Q1, according to S&P Global Market Intelligence. The aggregate HVCRE loan balance for US banks stood at $34.93 billion during the quarter, up from $29.11 billion in Q1 but down 5.2% from $36.83 billion a year ago 

HVCRE loans in the second quarter accounted for 0.24% of the sector’s total risk-weighted assets, up four basis points from a quarter earlier. 

Dublin, GA-based Morris Bank reported the highest ratio of HVCRE loans to risk-weighted assets among top-tier US banks with at least $1 billion in total assets. The Morris State Bancshares Inc. subsidiary reported $265.3 million in total HVCRE loans during the quarter, or 19.9% of its risk-weighted assets, S&P Global said. 

With $2.09 billion in total HVCRE loans as of June 30, Goldman Sachs retained its position as the top HVCRE lender for the third consecutive quarter. The total loan balance represented a 1.0% quarter-over-quarter increase and accounted for 0.3% of the company’s risk-weighted assets. 

Regulators define high-volatility commercial real estate ADC loans as credit facilities that primarily finance or refinance acquisition, developments or constructions of real properties. They’re used to provide financing to acquire, develop or improve properties into income-producing ones that are dependent on future income, sales or refinancing for repayments. 

The distressed property market is just beginning to unfold, with significant challenges still ahead. On October 22, hear experts from Trimont, Greystone, Transwestern and more discuss the rising tide of distressed assets, upcoming CMBS maturities, and stricter underwriting practices. Gain insights into what lies ahead as we transition into 2025 at Connect Distressed Investment & Finance at the Luxe on Sunset in LA.