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New Office Space Demand Drops 21% Year-Over-Year
New demand for office space nationally ended the year 31.3% below its May 2022 peak and fell 20.7% year-over-year to a VTS Office Demand Index (VODI) of 46 in December, VTS said Wednesday. A VODI of 46 indicates that new demand was flowing in at 46% of its 2018-2019 benchmark level.
The holidays and extreme weather conditions were factors, along with economic uncertainty. “The reality is that the outlook for the U.S. economy is still unknown, and expectations of a recession continue to loom large in 2023,” said VTS CEO Nick Romito. “Where the economy heads will be the through-thread for office demand decisions as we head into the new year.”
Locally, most cities tracked by the VODI declined Y-O-Y. The largest declines were reported in West Coast cities with heavy representation of TAMI sectors. Topping the ranking was Seattle, whose VODI fell 45.8% Y-O-Y.
- ◦Lease
