INDEPENDENT MARKET REPORT By JLL as at 31 December 2025 U.S. Economy Overview Macroeconomic drivers of office demand were mixed in 2025: major stock indices had a strong year, growing by roughly 15-20%, but labor markets softened over the course of the year despite improvements in 2024. While employment within the financial services sector continued to grow by 0.4% year-over-year, Professional Services, Information, and Government all saw marginal declines, and total office-using employment fell by 0.3%. Job openings continued their decline, falling 11% over the course of 2025. Over the course of the pandemic, U.S. office tenants cut roughly 9% of their office footprints through downsizing, but continued to expand headcounts by roughly 5%, leading to a gap between office footprints and employee space needs that has come into focus as more employers return to hybrid or full-time office attendance. This has allowed continued expansion and growth in leasing volumes despite the labor market softening, but this “RTO rebound” effect will have limited capacity to continue driving the demand recovery if job growth remains stagnant. Elevated levels of volatility tied to federal policy shifts and geopolitical tensions have the potential to undermine the office recovery. There is a well-established negative correlation between uncertainty and business investment spending, and large-scale workplace investments may come under renewed pressure if forecasting short-term shifts continues to be elusive. Real GDP ($ trillions) Employment shortfall (%) Y-o-Y change (%) GDP Growth Positive but Slowing Job Growth Stagnating, Remains Marginally Positive February 2020 2022 2021 2023 2024 2025 $26 $24 $22 $20 $18 $16 $14 $12 8% 4% 0% -4% -8% -12% -16% 15% 10% 5% 0% -5% -10% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Real GDP Year-over-year (YoY) change Additional interest rate relief is expected in 2026. Target policy rates were reduced by 75 bps over the course of 2025, and investors currently expect two additional cuts in 2026 and an additional 50 bps reduction in rates. JLL Property Clock Peaking phase Rising phase Falling phase Bottoming phase Northern VA, Washington, DC Los Angeles, Philadelphia Denver Boston, Orange County San Francisco Chicago, Minneapolis New Jersey, Phoenix Seattle Atlanta, Charlotte, Silicon Valley New York Dallas Austin, Houston, San Diego Miami / 36 / EXPANDING HORIZONS
RkJQdWJsaXNoZXIy NTM2MDQ5