By Brooke Jacobsen, Colliers
The Greater Cincinnati and Northern Kentucky office market is weathering the post-pandemic era with surprising nuance. While national headlines continue to focus on uncertainty and high vacancy, the local market is quietly seeing stable, albeit selective, activity, especially in healthcare and specialized user segments.
After a slow winter, leasing activity across the region began to thaw in the second quarter of 2025. Year-to-date net absorption remains slightly negative, but market sentiment is gradually shifting, particularly among small to mid-size tenants. Most of the deal activity is coming from users in the 2,500- to 5,000-square-foot range, with several groups focused on healthcare and logistics services. Cincinnati’s Class B and C office space is seeing an unexpected level of demand, driven by affordability, location flexibility and users with highly specific space needs.
Medical office continues to stand out as one of the most active sectors. Demand is strong across both urban and suburban submarkets, with notable traction in Cincinnati submarkets. Much of the recent healthcare-related activity has come from specialty practices, private groups and regional health systems looking to reposition their outpatient services. While Northern Kentucky offers value, many users are choosing to locate on the Cincinnati side of the river, where proximity to hospital systems and academic institutions is a key factor.
Tenant expectations remain high, even in secondary markets. Tenants in the market are prioritizing building quality, natural light, proximity and updated common areas. For medical users, accessibility and the ability to customize floorplans are major drivers. In this climate, tenants are willing to wait for the right space rather than compromise.
Another trend that’s hard to ignore is that logistics players continue to expand their operational footprints, with several out-of-market firms entering Cincinnati with small-scale satellite offices. This builds on several years of momentum from larger users like TQL, IEL and MegaCorp. Now, newer entrants are seeking 5,000 square feet or less, with an eye on regional hiring and proximity to distribution hubs.
While Northern Kentucky isn’t seeing the same volume of office leases as Cincinnati’s core, it remains appealing to users who want lower overhead, free parking and quicker commutes. That said, many tenants who begin their search in both submarkets often choose to finalize on the Ohio side, particularly if amenities and tenant improvement packages tilt the value proposition.
From an investment standpoint, smaller private buyers remain the most active participants in the market. High interest rates and cautious underwriting have kept institutional players on the sidelines, but the gap is being filled by owner-users and family offices who see long-term upside in well-located assets, especially in the medical category. The Cincinnati central business district started 2025 with a vacancy rate of 10.7 percent, the third lowest in the country, and is projected to tighten further by year’s end.
New construction remains limited, helping to prevent oversupply. Deliveries are projected to remain under 200,000 square feet this year, one of the lowest volumes since 2007. The lack of speculative development is keeping average asking rents steady. We are seeing office rents average around $15.18 per square foot, which is still below the national average but climbing slowly.
Looking ahead, one of the most anticipated developments in the Northern Kentucky region is the Covington Central Riverfront project, a $500 million public-private effort to redevelop the former IRS site along the Ohio River. The site is planned to include a mix of office, residential, educational and commercial uses. As the site evolves, it has the potential to not only attract professional services and institutional tenants but also elevate the surrounding submarket with long-term economic energy and leasing momentum.
In a market shaped by precision over volume, Cincinnati and Northern Kentucky’s office sector is gradually recalibrating. While leasing fundamentals remain in flux, niche demand and medical momentum are offering reasons for optimism — and opportunities for landlords and investors ready to meet the moment.
Brooke Jacobsen is an associate of office/retail services with Colliers. This article originally appeared in the July 2025 issue of Heartland Real Estate Business magazine.