Office Vacancy at 17.7%. Data Center Vacancy at 1.4%. Same Cities.

Two numbers

National office vacancy ended June at 17.7%, up 13 basis points from May but under the 18% line for the fifth month in a row and well below where it sat through most of 2025. Absorption has been positive for four quarters. The recovery is real, slow and concentrated in the best buildings.

Data center vacancy in the first half of 2026 was 1.4% nationally, a record low. Northern Virginia was at 0.3%, Atlanta at 1%, Dallas-Fort Worth at 1.8%, Chicago at 2.2%. Buildings lease before construction finishes. The constraint is not demand or capital. It is power, and the timeline to get it.

How the shortage reaches the office market

Data center developers need large flat sites near transmission lines, and they will pay office-land prices or better for them. Suburban office parks from the 1980s sit on exactly that kind of land. In Northern Virginia, in the Dallas suburbs and along the I-85 corridor in Atlanta, obsolete office buildings are being bought for the dirt under them and the substation next door. That takes office inventory off the market, which is part of why the vacancy rate has been falling even as demand grows slowly.

The tenants matter too. AI and cloud companies that lease data halls also lease offices, and they are the most active office tenants in several of the same markets. A company signing for 40 megawatts in Ashburn is also signing 60,000 square feet in Reston for the people who run it. Follow the power deals if you want to know where the office deals will be.

What an office owner should do with this

If you own suburban office near substation capacity, get the land valued as a data center site before you spend money on a lobby renovation. The answer may be that the building is worth more empty and demolished than full. That is a strange thing to hear about a building you have spent a decade leasing, and it is the correct answer in a growing number of submarkets.

If you own well-located urban office, the shrinking suburban inventory helps you. Tenants who were choosing between a downtown tower and a suburban campus now have fewer suburban options, and the ones that remain are older. Your rent growth assumption of 2% to 3% is safer than it was a year ago.

What a data center number cannot tell you

A 1.4% vacancy rate describes a market at the top of a cycle. It does not tell you the utility will deliver your power in 2028 instead of 2030, or that the chip generation your tenant designed for will still be the one they want when the building opens. The projects that make money are the ones with power secured in writing and a tenant signed before the concrete pour. Everything else is land speculation with a very expensive building on it.

Know which of your buildings is a site

The decision to hold, renovate or sell an office building to a data center developer depends on facts scattered across different files: the lease expiration ladder, which decides how fast the building can be emptied. The zoning and easement documents, which decide what can be built. The utility correspondence, which decides whether there is power. Assembling that picture for one building takes an asset manager a week. For a portfolio of 20 it never gets done.

Extract the expiration ladder and the termination rights from the leases, the use restrictions from the title file, and the capacity commitments from the utility letters, and the screen runs in a day per building. The owners who ran it in 2025 sold suburban office parks at land value while everyone else was still funding lobby renovations. The tools that make it a day instead of a week are the same ones that abstract leases for a refinancing. The data is the same. The question is different.