Seattle:
New Office Demand Jumps 75% MoM
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APRIL 2023
There were 35 new requirements in May, boosting demand by 75% MoM. Most demand is still from smaller tenants, with 71% of new requirements looking for less than 10k sf. Overall momentum remained positive, with the monthly level above the annual averages for 2022.
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Seattle:
New Office Demand Jumps 75% MoM
Copyright View the Space, Inc. 2023
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METHODOLOGY
Explore the key drivers below
Return of Demand
Legal takes the lead with 17 new requirements over the past three months. This was an increase of 325% compared to the preceding three-month period and +55% vs. the same period last year. The previous leader, professional services, now hold the second position. Together, these two industries make up 44% of the new requirements that entered the market in the past three months.
Legal on Top
While TI and free rent concessions remain elevated, starting rents are holding steady. The average proposed starting rent for Class A spaces 5k+ sf for a 5-year term or longer stands at $50 psf, one dollar higher than the average of comparable deals executed YTD. A compositional shift towards quality is contributing to the resilience of base rents. Average concession packages show signs of normalization, as proposed TIs have decreased by $5 to $85 per square foot compared to earlier this year.
Quality Keeps Rents Stable
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A look at the latest trends impacting office demand
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REPORT | APRIL 2023
Copyright View the Space, Inc. 2023
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METHODOLOGY
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METHODOLOGY
VTS is the leading provider of leasing, marketing, asset management, and tenant experience software for commercial real estate landlords, with market share averaging over 80% in core U.S. office markets. The VTS platform captures, aggregates, and anonymizes supply and demand data across all office asset classes and age segments. Due to VTS’ market share and the multiple spaces considered by tenants in a given search, VTS sees 99% of all newly created tenant requirements within the markets it serves. With this unprecedented view, VTS has developed an index, the VTS Office Demand Index, published monthly, to provide landlords, brokers, tenants, and the business community with visibility into a previously opaque segment of the market: real-time tenant demand in the US office leasing market.
The VTS Office Demand Index (VODI) is the earliest look into the health of the office market. The VODI, as an index capturing actual market actions of potential tenants - promises to be a source of greater certainty and the first to actually capture the demand for office space as it evolves during this critical period.
The VODI reflects the total square footage of unique tenant requirements surfaced by touring activity in a given month relative to the total square footage observed in VTS’ expansive network of leasing, marketing, and asset management software. Accounting for the total square footage observed helps distinguish changes in the demand for office space from the growth of VTS’ reach, as well as from changes in the supply of office space, e.g. due to fluctuation in vacancy rates or new construction.
To enhance its interpretation and its comparability across regions, VODI is reported as an indexed value using the 2018-2019 average level as a baseline valued at 100. The index is not seasonally adjusted, but it is smoothed using a 3-month trailing average.
To ensure the viability of VTS data for market insight, VTS suppresses monthly VODI data points informed by less than four customers, as well as all data aggregated prior to January 2018.
The markets referred to in this report correspond to the named cities, not metropolitan areas.
The VODI report includes analysis and commentary from MetroSight.
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METHODOLOGY
VTS Office Demand Index (VODI)
LAUREN RIEFFLIN
Kingston Marketing Group
lauren@kingstonmarketing.group
ERIC JOHNSON
VTS
eric.johnson@vts.com
Media Contacts
APRIL 2023
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Changes to the VODI Report
VTS will be shifting the cadence of the VODI report from monthly to quarterly and retiring its standalone Greenshoots Report. This means the March 2023 VODI report, scheduled to publish on Wednesday, April 26, will be the final monthly report. The new quarterly VODI report will be published in July, capturing data and findings from VTS over a three-month (quarterly) period moving forward. The new VODI report will include select data points from the former VTS Greenshoots report, providing all your need-to-know trends and takeaways for the office market in one comprehensive report.
For questions, data inquiries or to connect with a VTS spokesperson, contact eric.johnson@vts.com.
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aAPRIL 2023
VTS Office Demand Index (VODI)
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LAUREN RIEFFLIN
Kingston Marketing Group
lauren@kingstonmarketing.group
ERIC JOHNSON
VTS
eric.johnson@vts.com
Media Contacts
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