Leasing activity remained sluggish in the U.S. office market, while vacancy rates continued to rise in the first quarter of the year, according to the latest research from JLL.

JLL’s first quarter U.S. office report didn’t contain much in the way of surprises: The U.S. office market continues to struggle as companies seek smaller amounts of space and workers continue to work from home at least on a part-time basis.

According to JLL, office leasing volume in the United States during the last 12 months stood at just 89% of what this sector would typically see during a 12-month span before the COVID pandemic.

In a bit of good news, though, leasing volume did increase in the first quarter, with JLL reporting that the United States saw 50.4 million square feet of closed office leases during the first three months of the year. That is up 15.3% from the first quarter of 2024.

The higher leasing volume did not translate to a drop in vacancy rates, though. JLL said that the U.S. office sector posted 8.1 million square feet of negative net absorption in the first quarter of the year.

The loss in occupancy was elevated by federal lease terminations, federal contractor sublease additions and buildings removed for conversion that had space leased before removal.

Even these negative numbers were an improvement from the first quarter of 2024, when the U.S. office sector saw negative net absorption of more than 20 million square feet.

The U.S. office market total vacancy rate jumped by 34 basis points on quarter-over-quarter basis, hitting 22.64% in the first quarter, JLL reported.

Is there positive news? A bit. JLL predicted that net absorption is expected to stabilize during the remainder of the year. JLL also said that it expects vacancy rates to plateau and eventually decline.

This is partly because downsizing activity has lessened during the past year, with larger tenants trimming just 6.6% of their space once their office leases expire. With an increase in expansionary leases expected to hit the office sector throughout the rest of this year, JLL says, both absorption and vacancy rates should begin to improve in the second half of 2025.

In another key trend, JLL reported that the average number of days a week that employees at Fortune 100 companies are required to work in the office now stands at 3.74 days. That is up from 2.2 days in the fourth quarter of 2024.

Office investment volume also rose to $11 billion in the first quarter, according to JLL.