Across all office markets, the rise of co-working and new leasing platforms is causing disruption, pushing vacancy rates as high as 25%. Here are the 10 cities where office landlords are hit the worst by a lack of tenants.

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National office vacancies declined by 20 basis points in the fourth quarter, falling to 16.3%. This is the first time since 2011 that national vacancies declined by more than 10 basis points, and suggests that the office recovery is (finally) gaining long-awaited momentum. At 16.3%, the vacancy rate is still about 400 basis points above its cyclical low from mid-2007, but by several measures — including net absorption, new construction, and vacancy compression — 2015 was the best year for the office market in recent history. If anything, local news about construction booms in metros like Atlanta suggest that optimism is being served in rather large heaps.

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“Houston is gushing with empty offices as the price of oil hovers around $30 a barrel. Companies that once added office space aggressively are now eager to unload it.”

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The diminishing availability of office space across the US is creating challenges for major occupiers, according to a new report from CBRE. An improving economy and subsequent increase in office demand along with the slow commencement of new construction has led to a shortage of large blocks of available office space in some major cities, including Philadelphia, San Francisco and Manhattan. While construction activity began to increase recently, with many constrained central office markets having new projects under construction, heavy pre-leasing activity means that the increased supply is often not enough to meet demand from large space users. Among downtown markets in the third quarter of 2015, the fewest total available large blocks (defined as 100,000 square feet or more of contiguous space) in existing and under-construction buildings were in Philadelphia (six), San Francisco (seven) and South Manhattan (ten).

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The U.S. office market showed no signs of slowing down in the fourth quarter of 2015, helped along by an occupancy growth rate 1.3 times that of new supply, according to real estate research firm JLL. As further testament to the sector's strength, such expansion will continue for the next two years as conditions "showed no signs of a slowdown," GlobeSt.com reported.

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European office take-up will rise by 10 percent in 2016 with this rise in office demand expected to encourage increased development over the next 12 months, according to the Knight Frank European Commercial Property Outlook 2016. Development activity is likely to be shaped by the current polarisation of office demand, with occupier interest most strongly focused on prime city centre space, while older and less well-located offices will struggle to attract tenants. With prime commercial space in short supply in cities such as London, Paris, Dublin, Frankfurt and Madrid, occupiers seeking large centrally-located offices currently have very limited choices. However, in cities such as Amsterdam and Brussels, vacancy rates remain relatively high for Grade B offices and secondary locations, so as a result, the European commercial property market will step up the redevelopment of such properties.

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