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Office Demand Stabilizes Below Pre-Pandemic Levels
After two years of demand for office space veering between half and two-thirds of what it was before the pandemic, it appears office demand is showing signs of stability around these levels for the foreseeable future, says VTS. This determination is supported by persistently prevalent work-from-home rates and a cooling job market that directly impact the need for office space, according to the quarterly VTS Office Demand Index (VODI).
“What the office market has experienced over the past two years is likely what we will see for the immediate future,” said Nick Romito, CEO of VTS. “Although it is showing signs of life amid persistent headwinds, it remains to be seen if the office market will continue to rebound further from pandemic lows Amidst a cooling job market, new demand for office space has remained fairly consistent over the last two years despite these headwinds, which is a positive indicator of resiliency.”
At a VODI of 51, national demand for office space at the end of the third quarter was just half of pre-pandemic levels. The current level is two VODI points lower than Q2 and three VODI points higher than a year ago. A VODI of 100 is considered normal based on historical norms.
- ◦Lease
