National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
New Demand for Office Dips, But at Lower Rate Than Pre-Pandemic
After six consecutive months of growth, new demand for office space eased in July as concerns took hold over a surge in delta variant COVID-19 cases. However, the monthly decline—also spurred by seasonal fluctuation—was lower than the typical July pre-pandemic seasonality in both 2018 and 2019, VTS reported.
Nationally, the VTS Office Demand Index is now 16% below its 2018-2019 average, which is used as the index’s baseline. New office demand dropped 1.2% in July from June, but the drop was lower than the average July decline in 2018 and 2019 of 5.1%. New office demand is up 282% year-over-year.
“The delta variant is causing some uncertainty across the economy, so it’s no surprise we’re seeing that reflected in demand for office space as well,” said VTS CEO Nick Romito. “But there’s no need to hit the panic button yet. We’re likely looking at another delay to full recovery, but early indications point to continued relative stability as seen earlier in the year — not the massive drop-offs we saw when the pandemic first began.”
Boston, Los Angeles and Seattle bucked the national trend with a month-over-month increase in new demand, according to VTS.
- ◦Lease
