The busy spring season takes off with an exceptionally strong start. According to the latest VTS Office Demand Index (VODI), local markets, including San Francisco, Los Angeles, New York City, Boston, and Washington, D.C., experienced office demand increases of 30 percent or more in March.
Nationwide office demand also jumped up 31.3% month-over-month, which exceeds pre-pandemic March numbers in both 2018 and 2019.
The VODI tracks unique new tenant tour requirements, both in-person and virtual, of office properties in core U.S. markets, and is the earliest available indicator of upcoming office leasing activity as well as the only commercial real estate index to explicitly track new tenant demand.
Nick Romito, CEO of VTS, says, “The sluggish start to the year left us in limbo as to whether we’d see normal levels of spring activity return. Thankfully, the office leasing market had its spring awakening - and then some.”
While many local markets are seeing significant growth, others are experiencing single-digit increases only. For example, San Francisco’s office demand increased by 69% in March, while Chicago’s increased by 3.8%. This highlights a trend of the East Coast VODI sitting well above the West Coast VODI, averaging a 16.6% difference between the two regions.
“Some of what we’re seeing play out in the East Coast vs. West Coast office leasing markets are partially a reflection of the city's job market performance. Layoffs and declines in job postings have hit the tech sector particularly hard and consequently held office demand back in tech-heavy metro areas like San Francisco and Seattle,” said Ryan Masiello, Chief Strategy Officer of VTS.
What is the VTS Office Demand Index (VODI)?
The VODI is the earliest available indicator of forthcoming office real estate trends, locally and nationally, and represents up to 99% of new demand for office space in seven major markets, including New York City, Washington DC, Los Angeles, Chicago, Boston, Seattle, and San Francisco. The VODI tracks tenant tours, both in-person and virtual, of office properties across the nation and is the only commercial real estate index to track tenant demand.
The VTS Office Demand Index is powered by proprietary VTS Data, composed of aggregated and anonymized commercial real estate data from the 12B+ square feet of assets managed on the VTS platform.
Get today’s commercial real estate market trends in the latest VODI report:
- Which markets are farthest along in their road to recovery?
- Which market is showing the most consistent growth trend?
- Which markets are being impacted by local return to work levels?
Want to learn how to use the data in the VODI? The VTS Office Demand Index is just a sliver of the insights available to you.
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