Core Viewpoint - Office REITs are at a turning point as macroeconomic conditions improve, with demand recovering due to stronger employment and a shift towards higher-quality office spaces [2][4]. Group 1: Office REITs Overview - Several office REITs, including BXP Inc., Cousins Properties, SL Green, and Highwoods Properties, are set to report earnings soon, which will provide insights into leasing velocity and rent growth [3]. - The office real estate market is showing signs of recovery, with national net absorption turning positive and Class A absorption particularly strong [4]. Group 2: Market Fundamentals - Overall vacancy rates have stabilized near 20.5%, with a slight increase of 5 basis points from the previous quarter, marking the smallest annualized rise since 2020 [4]. - Asking rents have increased to approximately $38.37 per square foot, while sublease inventories have significantly declined, tightening available space in major markets [4][5]. Group 3: Construction Activity - Construction activity remains muted, with less than 20 million square feet under construction and a 35% decline in the construction pipeline in 2025 [5]. - The reduction in supply, combined with concentrated demand in gateway and Sun Belt markets, is supporting a firmer leasing environment [5][6]. Group 4: Company-Specific Insights - BXP Inc. is the largest publicly traded U.S. office REIT, managing a portfolio of 54.6 million square feet across 187 properties, and has completed asset dispositions worth over $1 billion [7][8]. - Cousins Properties is experiencing higher leasing activity in its Class A office assets due to tenant preferences for premium spaces, with a fourth-quarter revenue estimate of $248.65 million, indicating a 12.91% year-over-year increase [10][11]. - SL Green, focused on Manhattan office assets, is facing intense competition and is offering rent concessions, which may impact revenue growth; its fourth-quarter revenue estimate is $147.03 million, reflecting a 5.32% year-over-year rise [12][13]. - Highwoods Properties, with a strong focus on the Sun Belt, is well-positioned to benefit from tenant preferences for quality office spaces, with a fourth-quarter revenue estimate of $208.23 million, suggesting a 1.31% year-over-year rise [14][15].