Inside the Office Market's Flight to Quality: What Occupiers Need to Know

Top-Tier Buildings Outperform Lower-Tier Buildings in Large Office Market Urban Cores

The “flight-to-quality” was spurred by the start of the pandemic and the dramatic weakening of office market conditions.

A combination of tenant leverage and shrinking footprints provided an opportunity to upgrade space and stretch tenants’ lease spend. Additionally, upgraded, amenity-rich office spaces and neighborhoods act as a motivator for drawing workers back to the office.

The gap between lease rates and direct vacancy rates for Top-Tier Class A office buildings compared to Lower-Tier Class A and Class B buildings is widening. Since the beginning of Q3 2020, Top-Tier spaces in the central business districts (CBDs) of major office markets have recorded a positive net absorption of 32.6 million square feet. In contrast, Lower-Tier buildings have seen a negative net absorption of 125.8 million square feet. Additionally, leasing activity in Top-Tier buildings has surpassed that in Lower-Tier buildings.

The widening gap between top-tier and lower-tier office assets underscores a fundamental shift in how organizations are thinking about workplace strategy. For many occupiers, the flight-to-quality represents not just an upgrade in aesthetics or amenities, but a chance to realign their space with evolving business needs, talent expectations, and long-term performance goals. As market conditions continue to differentiate winners from laggards, understanding where leverage exists and how to use it, will be essential. Our full Q3 2025 Occupier Outlook Office report takes a deeper dive into these dynamics, offering data-backed insights and guidance to help occupiers navigate an office market in transition.

Note: This analysis includes buildings rated as Top-Tier Class A (5 Star) and Lower-Tier Class A, and Class B buildings (3 & 4 Star) with a minimum of 100,000 square feet located within the CBD. Owner-occupied buildings were removed. The top 15 office markets in terms of inventory were included: New York, Los Angeles, Chicago, Houston, Dallas, Philadelphia, Washington, DC, Atlanta, Phoenix, Miami, Orlando, San Francisco, Seattle, Tampa, and Boston.