Office Space Demand Shakes Off the Winter Doldrums
Springtime office demand got off to an especially strong start in March following the slower winter months, VTS reported. According to the latest VTS Office Demand Index (VODI), national demand for office space rose 31.3% from February to March, surpassing the month-over-month March growth recorded in pre-pandemic 2018 and 2019.
Nationally, the VODI jumped 15 points to a level of 63 in March, after relatively stable levels in the past few months. Despite its strong performance, the March VODI was still down 4.5% from a year ago. However, the year-over-year gap has narrowed significantly compared to February
“The Fed’s streak of interest rate hikes and a spectrum of severe weather lashing all areas of the country in recent months undoubtedly sidelined office touring activity and leasing decisions for many employers,” said Nick Romito, CEO of VTS. “The sluggish start to the year left us in limbo as to whether we’d see normal levels of spring activity return. Thankfully, the office leasing market had its spring awakening – and then some.”
Pictured: San Francisco, which saw the strongest recovery in new office demand among major markets.