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Major U.S. Office Markets See Wide Disparities in Demand During Q2
Office demand diverged sharply across major U.S markets in the second quarter of 2025, with some cities experiencing strong annual gains while others witnessed a quarter-over-quarter cooling, according to the latest VTS Office Demand Index Demand (VODI) report. Nationally, office demand was up just over 11% percent year-over-year as of June 30, despite it remaining relatively flat quarterly.
Chicago and San Francisco were the standouts, with Chicago up 60% Y-O-Y and up 35% quarter-over-quarter, while San Francisco demand rose 27% Y-O-Y and 40% from Q1. Seattle and New York both saw annual gains of roughly 18% but significant quarterly divergence, with Seattle down 38% and New York up 1%.
Conversely, Washington, DC, Los Angeles and Boston all experienced a striking reversal of post-pandemic recovery trends. The District saw the sharpest annual decline at 26%, while Boston had its worst post-pandemic quarter for demand, declining 46% from Q1.
“The last quarter presented a number of macroeconomic challenges to the office market, and despite that, demand among tenants remained relatively persistent, with national office demand posting double-digit annual gains,” said Nick Romito, CEO of VTS. “There’s a number of major economic, political, and innovation forces currently at play which have meaningful impacts on office demand – both in terms of headwinds and greenshoots. I think we’ll continue to see somewhat of a mixed bag with regards to office demand in at least the near term.”
- ◦Lease
