Office REITs: 1Q26 Quarterly: Broad based leasing strength disconnects from job growth

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Office REITs: 1Q26 Quarterly: Broad based leasing strength disconnects from job growth

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Office REITs

1Q26 Quarterly: Broad based leasing

strength disconnects from job growth

Industry Overview

Mostly beats and strong leasing to start the year 20 May 2026

1Q26 Office earnings season was positive with seven beats and one miss. Looking Equity

forward to FY2026, six REITs effectively raised guidance and two maintained. Leasing United States

momentum continued on both coasts and the Sunbelt, but for now rent growth is REITs

occurring primarily in New York City. See our recent NYC Deep Dive note. Despite macro Jana Galan

uncertainty, tenants are leasing space as delaying the decision results in options Research Analyst

dwindling and in some cases, rents/SF increasing through the lease negotiation process. BofAS+1 646 855-5042

Despite overall office-using job growth being muted, companies are choosing to upgrade jana.galan@bofa.com

space with rent as a percent revenue down. In addition, many companies underestimated Jeffrey Spector

Research Analyst

space needs post Covid and/or took short-term leases that are now expiring. BofAS

+1 646 855 1363

Occupancy improves but economic and leased gap remains jeff.spector@bofa.com

Andrew Berger

REIT portfolios have likely passed trough economic occupancy this quarter or next and Research Analyst

should start to realize accelerating FFO growth 2H26 through 2027. The pace of that BofAS

+1 646 855 1589

acceleration is not yet clear, though some REITs provided additional data to help andrew.berger2@bofa.com

quantify it: KRC provided a leased not yet occupied pipeline of $78 million, BXP noted its REITs Team

350 bps gap represents 1.6mn SF, of which 90% should commence in 2026, while SLG BofAS