National CRE News In Your Inbox.
Sign up for Connect emails to stay informed with CRE stories that are 150 words or less.
Office Demand Recovers in March After Slowdown as 2025 Began
For the first time in 20 months, demand for office space did not increase year-over-year during the first two months of 2025, according to the latest VTS Office Demand Index (VODI) report. A surge in March activity reversed January and February’s dip, bringing office demand up 4.6% Y-O-Y by the end of Q1, with the notable exceptions of New York City and Los Angeles, which both saw demand slip on an annual basis. This was offset by tech-heavy markets that previously favored remote work at the expense of office demand.
The slowdown at Q1’s start reflected growing uncertainty in the economy amid recent tension in global trade, VTS said. Declining job postings, slower hiring and broader concerns over unpredictable policy shifts likely played a role. The latest data from VTS finds national demand for office space is 68, roughly two-thirds of its pre-pandemic level.
“At first glance, a cooling labor market might seem like bad news for the health of the office sector — but the opposite could be true,” said Nick Romito, CEO of VTS. “In recent years, hiring surged, but employers had limited leverage to bring employees back to the office. Now, as jobs become harder to come by, employers are in a stronger position to require in-office attendance with less resistance.”
