Memphis Office Figures Report Q2 2026

Memphis’ office market remained challenged in Q2 2026 as occupier demand was uneven across property classes. The total direct vacancy rate increased to 16.7% from 15.0% one year earlier, while Class A vacancy rose to 15.5% and Class B vacancy reached 17.5%. Quarterly net absorption totaled -16,100 sq. ft., reflecting continued space givebacks in portions of the market. Despite softer occupancy trends, direct asking rents increased to $21.26 psf, up from $19.89 psf a year ago, indicating continued landlord confidence in well-positioned assets.

The U.S. economy entered mid-2026 on relatively solid footing, with GDP growth projected to average 2.2%, generally consistent with 2025 levels. Continued investment associated with artificial intelligence and related technologies remains an important driver of business expansion and capital spending. At the same time, elevated inflation, recently reaching 4.2%, and Treasury yields above 4% have created a more challenging operating environment for commercial real estate. A prospective easing of geopolitical tensions and stabilization of energy markets could help moderate inflation later in the year and improve business confidence. For the Memphis office market, a steadier economic backdrop could support leasing decisions that have been deferred amid uncertainty. Combined with the existing tenant pipeline, improving confidence could help stabilize occupancy levels and support incremental leasing activity through the remainder of 2026.