The national office vacancy rate dipped 10 basis points during the third quarter to 20%. This slight decrease is a positive development amid a sector working through distress, according to an analysis by Moody’s CRE economist Nick Villa.

Moody’s CRE expects vacancy to peak late next year or early 2026 and said the path ahead will be non-linear for the office sector, with the slight compression in Q3 likely attributable to net absorption turning positive after seven quarters of declines.

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