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VTS Office
Demand Index
(VODI)
Quarterly Report
Is demand finally thawing?
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in the market today.
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Only Los Angeles’ VODI fell more significantly on an annual basis, dropping 11.6 percent from a year earlier. The Los Angeles VODI has been receding from a sharp spike in new demand last spring that surpassed 100, fueled primarily by a number of large tenants entering the market.
All VODI markets are showing broader signs of recovering office demand. The VODI’s volatility makes it difficult to discern changes in trend. To assess signs of VODI markets’ recovery in recent reports, we have created charts showing each city’s VODI along with their changes compared to 12 months earlier, as they emerge each month. To help view the progression of change, we fit a trend line to the year-over-year changes for the period since late 2022–when “The Reset” or Post-Vaccine Wave of new demand for office space subsided.
Moving beyond Washington, D.C.:
The indications of gradual new growth in office demand varied across markets, showing up most clearly in Los Angeles and New York City, and altogether absent in San Francisco and Washington, D.C.
Read more local VODI trends
LOCAL
Read VODI impacts on local markets
New York City’s VODI surpassed 100 in November for the first time since the pandemic. In addition, five of the seven tracked markets experienced year-over-year VODI growth, with all showing broader signs of recovering office demand.
Read VODI impacts on local markets
LOCAL
At 74, the Los Angeles VODI was 32.1 percent above its level of 56 three months ago, and up 19.4 percent year-over-year. With the exception of a short-lived spike in May 2022, the current reading is Los Angeles’ highest since the Post-Vaccine Wave in the Summer of 2021, when the city’s VODI briefly surpassed 100.
At 74, the Los Angeles VODI is also the highest VODI among all cities reported. The city’s VODI growth owes primarily to a spike in tenants seeking large spaces, greater than 50,000 square feet. New demand for spaces of that size in Los Angeles is now higher than at any time since June 2021. While the WGA strikes may have hurt demand in Los Angeles as of recent, the tech sector made up for that recently.
In contrast, at 21, the Seattle VODI was 43.2 percent below its level of 37 in June, and down 52.3 percent year-over-year.
Flowing at only about one-fifth of its pre-pandemic pace in 2018-2019, Seattle’s VODI is the lowest among all VODI cities. Although Seattle saw considerable new demand in the medium-sized, 10,000-50,000 square foot category, it has seen no new requirements at all for large spaces in the 50,000+ square foot category since June. While the Seattle market occasionally sees a month without new demand in the 50,000+ square foot category, the 3-month absence of such demand from July to September is the only such gap since the early pandemic lockdown period.
SEE MORE LOCAL TRENDS
This refers to the average of the VODI cities’ month-over-month changes using absolute values, so that negative and positive fluctuations don’t cancel each other out.
1
NEW YORK CITY
NEW YORK CITY
SAN FRANCISCO
SAN FRANCISCO
In March, the Los Angeles VODI hit 85. The last time it was this high was during the Post-Vaccine Wave of new demand for office space in Summer 2021 (92 in August 2021). After that wave, Los Angeles saw a gradual decline in its VODI performance, reaching its low of 45 in February 2023.
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Pre-Pandemic
The Reset
The Crash
The Thawing
The Trough
New Demand for Office Space Over the Pandemic: An Illustration
From January 2018 to March 2020, new office demand fluctuated around a level of 100. In some cities, there was a noticeable downward trend in advance of the pandemic: Chicago, Los Angeles, Seattle; in the other cities the VODI was more ambiguous as to whether it was flat or slightly upward trending.
Pre-Pandemic
In Spring 2020 new office demand fell sharply to the “pandemic low.” Nationally, the VODI fell from 102 in March 2020 to 16 in June 2020, a decline of 84 percent. In some cities the sharp fall was followed by a quick v-shaped rise (New York City and Los Angeles); In others, there was a prolonged u-shaped trough (Washington, D.C., San Francisco, Boston, Chicago, and Seattle).
The Crash
From June 2020 through the end of that year, new office demand generally remained very low. In some cities, such as Boston, Chicago and Washington, D.C., the VODI remained more or less flat during this period. In others, such as San Francisco and Seattle, and most notably in New York City and Chicago, this period saw new office demand begin to recover, foreshadowing the phase that was to follow.
The Trough
After vaccines were introduced in early 2021 a sense of return-to-normalcy pervaded. Nationally, the VODI rose from 33 in January 2021 to 85 in June 2021, as demand that had been waiting on the sidelines during The Trough entered the market all at once in a short period. Once that pent-up demand was spent, the VODI quickly subsided from 87 in August 2021 to 61 in October 2021. Although cities whose economies are more remote work-friendly exhibited substantially lower levels of new office demand, all cities experienced a reset.
The Reset
Since October 2021 the VODI has been seemingly stagnant. It trended downward slightly in the earlier part of the period, and bottomed out in late-2022 and early-2023. Since then, it has slow v beaun aainina new momentum.
The Thawing
Explore nationwide trends
The gradual recovery of office demand continued through the end of 2024.
NATIONAL
Although the VODI tends to fluctuate a lot from month-to-month, it has risen substantially during the last two years.
The national VODI ended 2024 at a level of 64. That marks a 12.3 percent quarterly increase and 16.4 percent growth from a level of 55 a year ago.
The quarterly growth is well above typical for the season. Since 2018, excluding the atypical pandemic years of 2020 and 2021, the national VODI has fallen by 2.5 percent on average in the fourth quarter. In 2023, the VODI increased by 7.8 percent in that quarter.
SEE LOCAL TRENDS
The job market continues to cool, particularly in office-using sectors.
Job postings, a forward-looking measure of employers’ plans, are especially relevant to the office market as they reflect employers’ perception of future office space needs more directly than actual employment figures, which depend on worker availability.
View impact on VODI
The tech sector, which has been the most resistant to returning to the office, seems to be shifting towards a more favorable view of on-site work.
NATIONAL
Seattle has also seen its VODI trend downwards in recent years, since the
Post-Vaccine Wave of new office demand. However, it has strengthened in recent months, rising 38.2 percent on a quarterly basis and more than doubling from its low point of 20 in August 2023. Having said that, we want to see this trend continue for several more months before labeling it as a resurgence, as we did in Los Angeles and New York City.
Chicago’s VODI has also been declining since the Post-Vaccine Wave and has remained relatively flat since mid-2022. It is not yet clear in which direction it will head.
Finally, San Francisco and Boston both experienced minimal versions of the Post-Vaccine Wave, and despite some volatility, they have essentially remained flat at levels near or below 50 since then.
Seattle has also seen its VODI trend downwards in recent years, since the Post-Vaccine Wave of new office demand. However, it has strengthened in recent months, rising 38.2 percent on a quarterly basis and more than doubling from its low point of 20 in August 2023. Having said that, we want to see this trend continue for several more months before labeling it as a resurgence, as we did in Los Angeles and New York City.
Chicago’s VODI has also been declining since the Post-Vaccine Wave and has remained relatively flat since mid-2022. It is not yet clear in which direction it will head.
Finally, San Francisco and Boston both experienced minimal versions of the Post-Vaccine Wave, and despite some volatility, they have essentially remained flat at levels near or below 50 since then.
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KEY TAKEAWAYS
NATIONAL TRENDS
LOCAL TRENDS
METHODOLOGY
COMPANY
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The thawing of the office market is not taking place evenly across all markets. To obtain insight into specific markets, we applied the same metaphoric magnifying glass that we used for the national VODI, but city-by-city. The charts below show each city’s VODI along with their changes compared to 12 months earlier, as they emerge each month. To help view the progression of those changes, we fitted a trend line to them for the period from late 2022–when the spike of new demand for office space subsided at the end of The Reset
Los Angeles
Given the robust growth of new demand for office space in Los Angeles, it should come as no surprise to see a steep positive trend line there.
NEW YORK CITY
Despite some pullback in Q2 of 2024, New York City shows a steady increase in the 12-month VODI change trend line.
Despite some pullback in Q2 of 2024, New York City shows a steady increase in the 12-month VODI change trend line.
BOSTON
While the growth of the Los Angeles VODI and even the New York City VODI is fairly clear, Boston’s VODI is harder to assess. However, the trend line fitted to its 12-month changes helps see that Boston’s VODI is thawing, too. The crossing of the trend line from negative to positive means that the Boston VODI is slowly shifting from decline to growth.
CHICAGO AND SEATTLE
Applying the same exercise to Chicago and Seattle’s VODIs reveals a similar pattern to Boston’s though it is less progressed and still lurking beneath the surface, so to speak. Those cities’ fitted trend lines are just now crossing from negative to positive territory.
San Francisco and Washington, D.C.
Unlike the other VODI cities, new demand for office space in San Francisco and Washington, D.C. does not appear to be thawing (at least not yet). Despite some fluctuations, the fitted trend lines in both cities are essentially flat.
The heavy presence of the TAMI sector in San Francisco, with its stronger embrace of remote and hybrid work, can help explain that city’s VODI performance. Washington, D.C., does not have a similar TAMI presence to San Francisco’s, but both cities stand out for having two of the nation’s most educated workforces, and perhaps that resemblance holds some clues.
In San Francisco, even though demand by square footage has been largely flat, the count of new tenants has shown positive growth, as demand has been driven by smaller tenants. While small tenant requirements don’t add up to as much square footage as larger requirements would, an increasing count of new tenants carries a positive signal as to where the demand for office space might be headed.
National
Local
KEY TAKEAWAYS FROM THIS REPORT
The gradual recovery of office demand continued through the end of 2024.
NEXT
NEXT
VTS Office
Demand Index
(VODI)
QUARTERLY REPORT
January 2025
The gradual recovery of office demand continued through the end of 2024.
NATIONAL
Although the VODI tends to fluctuate a lot from month-to-month, it has risen substantially during the last two years.
The national VODI ended 2024 at a level of 64. That marks a 12.3 percent quarterly increase and 16.4 percent growth from a level of 55 a year ago.
The quarterly growth is well above typical for the season. Since 2018, excluding the atypical pandemic years of 2020 and 2021, the national VODI has fallen by 2.5 percent on average in the fourth quarter. In 2023, the VODI increased by 7.8 percent in that quarter.
SEE MORE NATIONAL TRENDS
The job market continues to cool, particularly in office-using sectors.
Job postings, a forward-looking measure of employers’ plans, are especially relevant to the office market as they reflect employers’ perception of future office space needs more directly than actual employment figures, which depend on worker availability.
The cooling job market underscores the shift back to in-office work as a key driver of the recovery.
NATIONAL
From January 2018 to March 2020, new office demand fluctuated around a level of 100. In some cities, there was a noticeable downward trend in advance of the pandemic: Chicago, Los Angeles, Seattle; in the other cities the VODI was more ambiguous as to whether it was flat or slightly upward trending.
Pre-Pandemic
In Spring 2020 new office demand fell sharply to the “pandemic low.” Nationally, the VODI fell from 102 in March 2020 to 16 in June 2020, a decline of 84 percent. In some cities the sharp fall was followed by a quick v-shaped rise (New York City and Los Angeles); In others, there was a prolonged u-shaped trough (Washington, D.C., San Francisco, Boston, Chicago, and Seattle).
The Crash
From June 2020 through the end of that year, new office demand generally remained very low. In some cities, such as Boston, Chicago, and Washington, D.C., the VODI remained more or less flat during this period. In others, such as San Francisco and Seattle, and most notably in New York City and Chicago, this period saw new office demand begin to recover, foreshadowing the phase that was to follow.
The Trough
After vaccines were introduced in early 2021 a sense of return-to-normalcy pervaded. Nationally, the VODI rose from 33 in January 2021 to 85 in June 2021, as demand that had been waiting on the sidelines during The Trough entered the market all at once in a short period. Once that pent-up demand was spent, the VODI quickly subsided from 87 in August 2021 to 61 in October 2021. Although cities whose economies are more remote work-friendly exhibited substantially lower levels of new office demand, all cities experienced a reset.
The Reset
Since October 2021 the VODI has been seemingly stagnant. It trended downward slightly in the earlier part of the period, and bottomed out in late-2022 and early-2023. Since then, it has slowly begun gaining new momentum.
The Thawing
Read VODI impacts on local markets
New York City’s VODI surpassed 100 in November for the first time since the pandemic. In addition, five of the seven tracked markets experienced year-over-year VODI growth, with all showing broader signs of recovering office demand.
LOCAL
The thawing of the office market is not taking place evenly across all markets. To obtain insight into specific markets, we applied the same metaphoric magnifying glass that we used for the national VODI, but city-by-city. The charts below show each city’s VODI along with their changes compared to 12 months earlier, as they emerge each month. To help view the progression of those changes, we fitted a trend line to them for the period from late 2022–when the spike of new demand for office space subsided at the end of The Reset.
Read more local VODI trends
Read more local VODI trends
The indications of gradual new growth in office demand varied across markets, showing up most clearly in Los Angeles and New York City, and altogether absent in San Francisco and Washington, D.C.
LOCAL
Get a pulse on what’s happening in the market today.
Los Angeles
NEW YORK CITY
Despite some pullback in Q2 of 2024, New York City shows a steady increase in the 12-month VODI change trend line.
BOSTON
While the growth of the Los Angeles VODI and even the New York City VODI is fairly clear, Boston’s VODI is harder to assess. However, the trend line fitted to its 12-month changes helps see that Boston’s VODI is thawing, too. The crossing of the trend line from negative to positive means that the Boston VODI is slowly shifting from decline to growth.
CHICAGO AND SEATTLE
Applying the same exercise to Chicago and Seattle’s VODIs reveals a similar pattern to Boston’s though it is less progressed and still lurking beneath the surface, so to speak. Those cities’ fitted trend lines are just now crossing from negative to positive territory.
San Francisco and Washington, D.C.
Unlike the other VODI cities, new demand for office space in San Francisco and Washington, D.C. does not appear to be thawing (at least not yet). Despite some fluctuations, the fitted trend lines in both cities are essentially flat.
The heavy presence of the TAMI sector in San Francisco, with its stronger embrace of remote and hybrid work, can help explain that city’s VODI performance. Washington, D.C., does not have a similar TAMI presence to San Francisco’s, but both cities stand out for having two of the nation’s most educated workforces, and perhaps that resemblance holds some clues.
In San Francisco, even though demand by square footage has been largely flat, the count of new tenants has shown positive growth, as demand has been driven by smaller tenants. While small tenant requirements don’t add up to as much square footage as larger requirements would, an increasing count of new tenants carries a positive signal as to where the demand for office space might be headed.
Copyright View the Space, Inc. 2025
BACK TO TOP
METHODOLOGY
National
Local
KEY TAKEAWAYS FROM THIS REPORT
New York City’s VODI surpassed 100 in November for the first time since the pandemic. In addition, five of the seven tracked markets experienced year-over-year VODI growth, with all showing broader signs of recovering office demand.
NEXT
At the other end of the spectrum, new demand for office space in Washington, D.C., was down 32.3 percent year-over-year, though it held steady on a quarterly basis.
The tech sector, which has been the most resistant to returning to the office, seems to be shifting towards a more favorable view of on-site work.
NEXT
The gradual recovery of office demand continued through the end of 2024.
San Francisco, Boston, Chicago, and Seattle are finally beginning to thaw. New demand for office space remains the highest in Los Angeles and New York City, though after gaining significant momentum over the last two years, both cities have seen their VODI recede recently. The office market in Washington, D.C., the only city whose VODI declined year-over-year, may be paralyzed in anticipation of the presidential election.
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At the current growth rate of nine percentage points per year, the VODI would reach 100 by December 2028, marking a full return to the pre-pandemic average for new office demand from 2018-2019.
Of course, there is no assurance that the recent steady recovery of the VODI will continue unchanged in the years ahead.
It is also important to understand what the VODI reflects, and that it is distinct from office occupancy. The VODI provides insight into the dynamics of office demand, distinct from office occupancy. When an employer begins searching for new office space, they typically spend several months exploring options, during which they become part of the pool of active demand. The VODI captures this by measuring new demand—the influx of prospective tenants entering the pipeline of seekers. In contrast, office occupancy reflects the share of office space currently in use. While a rise in active demand often signals faster growth in office occupancy, the latter is also influenced by factors such as expiring leases and changes in office supply, including new construction or conversions.
In more detail:
After peaking around mid-2022, job postings have steadily declined. Though still above pre-pandemic levels—a testament to the Federal Reserve’s success in achieving a “soft landing” by curbing inflation without triggering a recession—they are still declining. Headline unemployment and job numbers paint a similar picture.
Office-using employment has fared worse, with growth in VODI markets remaining at or below zero since late-2022.
New York City’s VODI reached 101 in November, surpassing the pre-pandemic benchmark for the first time since the start of the pandemic. It decreased slightly to 94 in December, resulting in 54.1 percent growth on a quarterly basis. On an annual basis, New York City’s VODI was up 25.3 percent compared to a year earlier.
The rise of New York City’s VODI in 2024 was supported by an abundance of tech sector tenants seeking space, especially in the fourth quarter. It was also supported by a lot of large tenants that entered the market in 2024, especially in finance, a trend that is poised to continue.
New York City’s solid office demand growth was hardly an exception. 5 of the 7 VODI markets experienced annual growth, including four with year-over-year growth greater than 10 percent. Two markets – Washington, D.C., and Boston – were close to flat, the former showing slight annual growth, and the latter an even slighter decline.
January 2025
New York City’s VODI reached 101 in November, surpassing the pre-pandemic benchmark for the first time since the start of the pandemic. It decreased slightly to 94 in December, resulting in 54.1 percent growth on a quarterly basis. On an annual basis, New York City’s VODI was up 25.3 percent compared to a year earlier.
The rise of New York City’s VODI in 2024 was supported by an abundance of tech sector tenants seeking space, especially in the fourth quarter. It was also supported by a lot of large tenants that entered the market in 2024, especially in finance, a trend that is poised to continue.
New York City’s solid office demand growth was hardly an exception. 5 of the 7 VODI markets experienced annual growth, including four with year-over-year growth greater than 10 percent. Two markets – Washington, D.C., and Boston – were close to flat, the former showing slight annual growth, and the latter an even slighter decline.
Only Los Angeles’ VODI fell more significantly on an annual basis, dropping 11.6 percent from a year earlier. The Los Angeles VODI has been receding from a sharp spike in new demand last spring that surpassed 100, fueled primarily by a number of large tenants entering the market.
All VODI markets are showing broader signs of recovering office demand. The VODI’s volatility makes it difficult to discern changes in trend. To assess signs of VODI markets’ recovery in recent reports, we have created charts showing each city’s VODI along with their changes compared to 12 months earlier, as they emerge each month. To help view the progression of change, we fit a trend line to the year-over-year changes for the period since late 2022–when “The Reset” or Post-Vaccine Wave of new demand for office space subsided.
Without exception, all VODI markets’ trends have an upward slope and have crossed from negative to positive territory.
The national VODI closed the year 16.4 percent higher than a year ago and 39.1 percent higher than two years ago.
At this pace of growth, it would take approximately four more years for the VODI to reach a level of 100 in December.
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The cooling job market underscores the shift back to in-office work as a key driver of the recovery.
The increase in new demand for office space – even amid a cooling labor market – reflects growing clarity around hybrid and remote work norms, giving employers more confidence to pursue their office space needs.
However, the Technology, Advertising, Media, and Information sector (TAMI) continues to defy this trend, maintaining a stronger aversion to in-person work than other office-using industries.
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The national VODI closed the year 16.4 percent higher than a year ago and 39.1 percent higher than two years ago.
At this pace of growth, it would take approximately four more years for the VODI to reach a level of 100 in December.
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In December 2022, the VODI was at 46 – its lowest value since the end of the post-pandemic wave of new demand that we call The Reset.
A year later, in December 2023, it had risen nine percentage points from 46 to 55.
By December 2024, the current reading, it increased an additional nine percentage points from 55 to 64.
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Pre-Pandemic
The Reset
The Crash
The Recovery
The Trough
New Demand for Office Space Over the Pandemic: An Illustration
Is demand finally thawing?
From January 2018 to March 2020, new office demand fluctuated around a level of 100. In some cities, there was a noticeable downward trend in advance of the pandemic: Chicago, Los Angeles, Seattle; in the other cities the VODI was more ambiguous as to whether it was flat or slightly upward trending.
Pre-Pandemic
In Spring 2020, new office demand fell sharply to the “pandemic low.” Nationally, the VODI fell from 102 in March 2020 to 16 in June 2020, a decline of 84 percent. In some cities the sharp fall was followed by a quick v-shaped rise (New York City and Los Angeles); In others, there was a prolonged u-shaped trough (Washington, D.C., San Francisco, Boston, Chicago, and Seattle).
The Crash
From June 2020 through the end of that year, new office demand generally remained very low. In some cities, such as Boston, Chicago, and Washington, D.C., the VODI remained more or less flat during this period. In others, such as San Francisco and Seattle, and most notably in New York City and Chicago, this period saw new office demand begin to recover, foreshadowing the phase that was to follow.
The Trough
After vaccines were introduced in early 2021 a sense of return-to-normalcy pervaded. Nationally, the VODI rose from 33 in January 2021 to 85 in June 2021, as demand that had been waiting on the sidelines during The Trough entered the market all at once in a short period. Once that pent-up demand was spent, the VODI quickly subsided.
The Reset
After October 2021, the VODI seemed almost stagnant. It eventually bottomed out at the end of 2022 and has been gradually recovering since then.
The Recovery
Together, that amounts to a 39.1 percent increase over the two years since the VODI bottomed out.
Dec 2022
VODI
46
Dec 2023
55
Dec 2024
64
VODI has risen substantially during the last two years
What the VODI reflects:
The VODI measures the pace at which new office space requirements, adjusted for market size, enter the pool of active demand. A reading of 100 indicates that new requirements are flowing in at the same average pace as during 2018-2019. The VODI reflects only the rate at which office space is likely to fill—not how it may empty out or change due to supply fluctuations.
While the VODI tracks growth in new demand, office occupancy reflects the proportion of office space currently in use. Even if the VODI reaches 100 and soon after active demand quickly recovers to pre-pandemic levels, this simply means that offices will likely fill at the same pace as before the pandemic—but it could still take a long time for occupancy to return to pre-pandemic levels. The pandemic caused a sharp decline in occupancy, and recovery of the VODI does not mean that the gap left by that drop has been filled—only that the pace of filling has recovered.
How the VODI differs from occupancy:
Occupancy is further shaped by the overall supply of office space, which fluctuates as buildings are constructed, demolished, or repurposed. Currently, minimal new office construction and modest conversions of office buildings to residential or other uses are slightly helping to boost occupancy rates.
The role of office supply:
The cooling job market underscores the shift back to in-office work as a key driver of the recovery.
The increase in new demand for office space – even amid a cooling labor market – reflects growing clarity around hybrid and remote work norms, giving employers more confidence to pursue their office space needs.
However, the TAMI sector continues to defy this trend, maintaining a stronger aversion to in-person work than other office-using industries.
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This cooling labor market casts doubt on job growth as a primary driver of the office demand recovery. Instead, the recovery appears closely tied to the steady decline in remote and hybrid work. While the share of workdays done from home remains well above pre-pandemic levels (less than 10 percent in 2019), it has fallen significantly from its pandemic peak of over 60 percent. We expect work-from-home rates to stabilize permanently above pre-pandemic levels, but the descent is ongoing, especially in the largest U.S. metros.
The decline in work-from-home is echoed by high-profile firms instituting return-to-office mandates. Despite this shift, significant remote and hybrid slack remains, suggesting further declines in work-from-home could still occur.
This backdrop of a cooling labor market and a return to the office highlights the latter as a key driver of the office demand recovery. The passage of time is helping employers distinguish between what is short-lived and what is likely to persist in work-from-home dynamics. It also compels some to act as leases expire and new office arrangements must be made.
Overall, the office demand recovery reflects growing clarity around hybrid and remote work norms, finally providing employers with the confidence to move forward with their office space plans.
What about politics? While the new administration is broadly perceived as pro-business, it is difficult to imagine how that might boost office demand without having a similar effect on the labor market. Additionally, its reputation for unpredictability fuels economic uncertainty, which tends to dampen employer confidence in making long-term office space commitments.
The TAMI sector remains a notable exception. Its aversion to in-person work is evident in its declining share of new office demand. In February 2020, TAMI accounted for 33.7 percent of new office demand by square footage. By December 2024, this had fallen to just 17.4 percent—roughly half its pre-pandemic share.
In September, the national VODI was 57. That level reflects a modest decline from one quarter ago. Quarter-over-quarter, the VODI declined by 8.1 percent from a level of 62 in June. The VODI tends to be a fairly volatile series, and we consider movements of less than ten percentage points to be modest.
The decline is in line with normal seasonal trends. During 2018, 2019, 2022, and 2023 (glossing over abnormal pandemic years), the VODI declined by 13.8 percent on average from June to September.
National
Boston
New York City
Washington, D.C.
Seattle
San Francisco
Los Angeles
Chicago
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National
Boston
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Washington, D.C.
Seattle
San Francisco
Los Angeles
Chicago
Without exception, all VODI markets’ trends have an upward slope and have crossed from negative to positive territory.
That said, some VODI markets are more clearly experiencing an office demand recovery than others. The most pronounced office demand recoveries are in New York City, Chicago, and Seattle. The markets whose recovery is more nascent are San Francisco and Washington, D.C., followed by Boston.
Last but not least, the Los Angeles VODI was clearly rising until Spring 2024, and its trend line continues to indicate a recovery despite the VODI decline since then. Time will tell whether the recent decline is just Los Angeles’ office market taking a breather.
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Boston
New York City
Washington, D.C.
Seattle
San Francisco
Los Angeles
Chicago
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Washington, D.C.
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San Francisco
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Washington, D.C.
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Washington, D.C.
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National
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Los Angeles
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National
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Los Angeles
Chicago
New York City’s VODI surpassed 100 in November for the first time since the pandemic. In addition, five of the seven tracked markets experienced year-over-year VODI growth, with all showing broader signs of recovering office demand.
The cooling job market underscores the shift back to in-office work as a key driver of the recovery.
The increase in new demand for office space – even amid a cooling labor market – reflects growing clarity around hybrid and remote work norms, giving employers more confidence to pursue their office space needs.
However, the Technology, Advertising, Media, and Information sector (TAMI) continues to defy this trend, maintaining a stronger aversion to in-person work than other office-using industries.
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Explore nationwide trends
The national VODI closed the year 16.4 percent higher than a year ago and 39.1 percent higher than two years ago.
At this pace of growth, it would take approximately four more years for the VODI to reach a level of 100 in December.
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Although the VODI tends to fluctuate a lot from month-to-month, it has risen substantially during the last two years.
In December 2022, the VODI was at 46 – its lowest value since the end of the post-pandemic wave of new demand that we call The Reset.
A year later, in December 2023, it had risen nine percentage points from 46 to 55.
By December 2024, the current reading, it increased an additional nine percentage points from 55 to 64.
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VODI
Dec 2022
46
Dec 2023
55
Dec 2024
64
VODI has risen substantially during the last two years
The VODI measures the pace at which new office space requirements, adjusted for market size, enter the pool of active demand. A reading of 100 indicates that new requirements are flowing in at the same average pace as during 2018-2019. The VODI reflects only the rate at which office space is likely to fill—not how it may empty out or change due to supply fluctuations.
What the VODI reflects:
The VODI measures the pace at which new office space requirements, adjusted for market size, enter the pool of active demand. A reading of 100 indicates that new requirements are flowing in at the same average pace as during 2018-2019. The VODI reflects only the rate at which office space is likely to fill—not how it may empty out or change due to supply fluctuations.
What the VODI reflects:
The VODI measures the pace at which new office space requirements, adjusted for market size, enter the pool of active demand. A reading of 100 indicates that new requirements are flowing in at the same average pace as during 2018-2019. The VODI reflects only the rate at which office space is likely to fill—not how it may empty out or change due to supply fluctuations.
What the VODI reflects:
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Pre-Pandemic
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The Crash
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The Trough
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The Reset
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The Thawing
Could we be at
inflection point?
Jan '18
Mar '20
Jun '20
Oct '21
Jan '23
Jan '21
Jun '24
New Demand for Office Space Over the Pandemic: An Illustration
From January 2018 to March 2020, new office demand fluctuated around a level of 100. In some cities, there was a noticeable downward trend in advance of the pandemic: Chicago, Los Angeles, Seattle; in the other cities the VODI was more ambiguous as to whether it was flat or slightly upward trending.
Pre-Pandemic
In Spring 2020 new office demand fell sharply to the “pandemic low.” Nationally, the VODI fell from 102 in March 2020 to 16 in June 2020, a decline of 84 percent. In some cities the sharp fall was followed by a quick v-shaped rise (New York City and Los Angeles); In others, there was a prolonged u-shaped trough (Washington, D.C., San Francisco, Boston, Chicago, and Seattle).
The Crash
From June 2020 through the end of that year, new office demand generally remained very low. In some cities, such as Boston, Chicago, and Washington, D.C., the VODI remained more or less flat during this period. In others, such as San Francisco and Seattle, and most notably in New York City and Chicago, this period saw new office demand begin to recover, foreshadowing the phase that was to follow.
The Trough
After vaccines were introduced in early 2021 a sense of return-to-normalcy pervaded. Nationally, the VODI rose from 33 in January 2021 to 85 in June 2021, as demand that had been waiting on the sidelines during The Trough entered the market all at once in a short period. Once that pent-up demand was spent, the VODI quickly subsided from 87 in August 2021 to 61 in October 2021. Although cities whose economies are more remote work-friendly exhibited substantially lower levels of new office demand, all cities experienced a reset.
The Reset
Since October 2021 the VODI has been seemingly stagnant. It trended downward slightly in the earlier part of the period, and bottomed out in late-2022 and early-2023. Since then, it has slowly begun gaining new momentum.
The Thawing
At the current growth rate of nine percentage points per year, the VODI would reach 100 by December 2028, marking a full return to the pre-pandemic average for new office demand from 2018-2019.
Of course, there is no assurance that the recent steady recovery of the VODI will continue unchanged in the years ahead.
It is also important to understand what the VODI reflects, and that it is distinct from office occupancy. The VODI provides insight into the dynamics of office demand, distinct from office occupancy. When an employer begins searching for new office space, they typically spend several months exploring options, during which they become part of the pool of active demand. The VODI captures this by measuring new demand—the influx of prospective tenants entering the pipeline of seekers. In contrast, office occupancy reflects the share of office space currently in use. While a rise in active demand often signals faster growth in office occupancy, the latter is also influenced by factors such as expiring leases and changes in office supply, including new construction or conversions.
In more detail:
The national VODI closed the year 16.4 percent higher than a year ago and 39.1 percent higher than two years ago.
At this pace of growth, it would take approximately four more years for the VODI to reach a level of 100 in December.
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Explore nationwide trends
After peaking around mid-2022, job postings have steadily declined. Though still above pre-pandemic levels—a testament to the Federal Reserve’s success in achieving a “soft landing” by curbing inflation without triggering a recession—they are still declining. Headline unemployment and job numbers paint a similar picture.
Office-using employment has fared worse, with growth in VODI markets remaining at or below zero since late-2022.
This cooling labor market casts doubt on job growth as a primary driver of the office demand recovery. Instead, the recovery appears closely tied to the steady decline in remote and hybrid work. While the share of workdays done from home remains well above pre-pandemic levels (less than 10 percent in 2019), it has fallen significantly from its pandemic peak of over 60 percent. We expect work-from-home rates to stabilize permanently above pre-pandemic levels, but the descent is ongoing, especially in the largest U.S. metros.
The decline in work-from-home is echoed by high-profile firms instituting return-to-office mandates. Despite this shift, significant remote and hybrid slack remains, suggesting further declines in work-from-home could still occur.
This backdrop of a cooling labor market and a return to the office highlights the latter as a key driver of the office demand recovery. The passage of time is helping employers distinguish between what is short-lived and what is likely to persist in work-from-home dynamics. It also compels some to act as leases expire and new office arrangements must be made.
Overall, the office demand recovery reflects growing clarity around hybrid and remote work norms, finally providing employers with the confidence to move forward with their office space plans.
In September, the national VODI was 57. That level reflects a modest decline from one quarter ago. Quarter-over-quarter, the VODI declined by 8.1 percent from a level of 62 in June. The VODI tends to be a fairly volatile series, and we consider movements of less than ten percentage points to be modest.
The decline is in line with normal seasonal trends. During 2018, 2019, 2022, and 2023 (glossing over abnormal pandemic years), the VODI declined by 13.8 percent on average from June to September.
Explore nationwide trends
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That said, some VODI markets are more clearly experiencing an office demand recovery than others. The most pronounced office demand recoveries are in New York City, Chicago, and Seattle. The markets whose recovery is more nascent are San Francisco and Washington, D.C., followed by Boston.
Last but not least, the Los Angeles VODI was clearly rising until Spring 2024, and its trend line continues to indicate a recovery despite the VODI decline since then. Time will tell whether the recent decline is just Los Angeles’ office market taking a breather.
Read VODI impacts on local markets
See VODI Methodology
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