Albany Commercial Office Space for Rent

Q4 2025

Albany Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Albany commercial real estate (CRE) market in late 2025 is defined by steady economic fundamentals and a resilient housing sector. The region's labor market is growing, with non-farm jobs increasing by 0.9% year-over-year and unemployment remaining low at 3.6% [3]. The Office sector is stabilizing, with vacancy rates holding near 13% as the market absorbs inventory [1]. Multifamily and residential markets are generating significant attention, with the Albany-Schenectady-Troy metro ranked as the 18th hottest housing market in the nation due to high demand and limited inventory [2]. Retail activity is vibrant, dominating tenant search volume, while Industrial demand is supported by growth in the trade and transportation sectors [3, 5].

TenantBase Proprietary Data [5] highlights the distribution of active tenant demand over the last 90 days:

  • Retail/Storefront dominated market activity with 73.08% of all searches [5].
  • Warehouse was the second most active sector at 25.00% [5].
  • Office accounted for a minimal 1.92% of total search volume [5].

Office Market

Market Overview Albany's office market is showing signs of stabilization, with vacancy rates decreasing slightly as the market adjusts to new workplace dynamics.

  • Vacancy & Availability: The overall office vacancy rate fell to 13.1% in the second half of the year, a decrease of 30 basis points from the previous period [1]. The Albany Central Business District (CBD) reports a slightly higher vacancy of 14.8%, while the suburban submarkets are tighter at 13.5% [1].
  • Rental Rates: The average asking lease rate is $18.71 per sq. ft. Full Service Gross [1]. Class A space in the CBD commands higher rents at $20.51 per sq. ft. [1].
  • Sublease Market: Sublease availability has risen to 2.1%, with the majority of available space found within Class A products [1].
  • Tenant Activity: TenantBase data reflects a quiet market for new entrants, with office inquiries representing less than 2% of total demand [5].

TenantBase Activity [5]

  • Demand Share: Office accounted for 1.92% of total search volume [5].
  • Lease Term Preference: The single recorded inquiry sought a Less than one year term, underscoring a continued desire for flexibility among smaller tenants [5].

Industrial & Warehouse Market

Market Overview The industrial sector remains a vital economic engine for the Capital Region, supported by job growth in logistics and a steady appetite for warehouse space.

  • Economic Drivers: The Trade, Transportation, and Utilities sector added 500 jobs year-over-year, reinforcing the demand for industrial real estate infrastructure [3].
  • Leasing Activity: Warehouse space captured a quarter of all tenant inquiries in the last 90 days, indicating healthy demand from small-to-mid-sized users [5].
  • Tenant Preferences: TenantBase data shows a preference for mid-term leases in this sector.

TenantBase Activity [5]

  • Demand Share: Warehouse accounted for 25.00% of total search volume [5].
  • Lease Term Preference: Demand is split between short-term flexibility and mid-term stability:
    • 3-5 Years: 66.67% of deals [5].
    • 1-2 Years: 33.33% of deals [5].
  • Size Requirements: Tenants seeking 3-5 year terms have substantial space needs, averaging between 13,250 SF and 17,500 SF [5].

Retail Market

Market Overview Retail is currently the strongest performing asset class in terms of tenant interest, supported by a stable local economy.

  • Tenant Interest: Retail dominated search activity in Q4, capturing nearly three-quarters of all inquiries [5].
  • Leasing Dynamics: Tenants are seeking a mix of lease terms, with a notable interest in shorter initial commitments to mitigate risk.

TenantBase Activity [5]

  • Demand Share: Retail/Storefront activity dominated with 73.08% of all search volume [5].
  • Lease Term Preference: Retail tenants show a preference for shorter initial commitments:
    • 1-2 Years: 40.00% of deals [5].
    • 5+ Years: 26.67% of deals [5].
    • 3-5 Years: 20.00% of deals [5].
  • Top Locations: Tenant interest is overwhelmingly concentrated in the core Albany, Schenectady, Troy metro area (5 deals), followed by Schenectady specifically (2 deals) [5].

Multifamily Market

Market Overview The multifamily and broader residential market in Albany is robust, characterized by high demand and limited supply.

  • Market Heat: The Albany-Schenectady-Troy metro area was ranked the 18th hottest housing market in the U.S. in November 2025, driven by high demand and inventory levels that remain below pre-pandemic norms [2, 4].
  • Price Growth: Home prices are forecast to rise modestly by 1.5% to 2.0% through the end of 2025, which continues to support rental demand as some buyers are priced out of ownership [4].
  • Inventory: New listings are slowly returning, but labor shortages and supply chain delays are keeping new construction deliveries slower than demand [4].

2026 Outlook

Looking ahead to 2026, the Albany market is positioned for stability, supported by a recovering office sector and a tight housing market.

  • Housing Constraints: Inventory levels are expected to improve gradually but remain tight, keeping the "hottest market" dynamics in play well into 2026 [4].
  • Office Recovery: With vacancy rates stabilizing and conversions of obsolete space continuing, the office market is expected to maintain its slow but steady recovery [1].
  • Economic Stability: Continued job growth in private education, health services, and professional business services will provide a strong foundation for commercial real estate demand [3].

Sources

  1. CBRE: Figures | Albany Office | H2 2024 (© 2025)
  2. The Daily Herald: Albany-Schenectady-Troy Real Estate Market Report Nov 2025
  3. NY Department of Labor: Labor Statistics for the Capital Region Sept 2025
  4. Anthony Gucciardo: Unveiling 2025 Housing Market Trends for Albany NY Realtors
  5. TenantBase Proprietary Market Data (Albany - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.