VTS reports that office demand is up in New York and Los Angeles and that Nationwide office demand experienced its 9th month in a row of year over year growth! But other cities, like Boston, San Francisco, and Seattle, aren’t doing so well. Denver feels like office demand is up compared to the pandemic years, at least Premises Commercial’s activity is up!

Demand for office space is skyrocketing, especially in New York City and Los Angeles

By Jane Thier

Big city living officially includes offices again.

Demand for office space in New York City and Los Angeles has reached the outer edges of the pre-pandemic rate of demand, according to the latest quarterly Office Demand Index from real estate software firm VTS, released Wednesday.

In March 2024, the nation’s two largest cities by population experienced their highest levels of office demand since August 2021. It’s part of a larger upward trend blanketing the U.S. as March marked the ninth consecutive month of positive year-over-year growth in office demand, VTS found. Perhaps that’s no surprise, as work-from-home rates, by their count, have dropped to their lowest ever since lockdowns.

The VTS Office Demand Index (VODI) tracks “unique new tenant tour requirements of office properties in core U.S. markets,” which the company uses as a leading indicator of office leasing activity. Last month, national office space demand grew from 58% to 65% of its average pre-pandemic level—which VTS chalks up both to a rising trend and a seasonal boost. (Office interest tends to pick up in springtime, the firm found.)

“We are hearing on the ground and on the streets that working from the office is increasingly becoming the norm again for many industries and metro areas,” Nick Romito, VTS chief executive, wrote in the report. But, naturally, some holdouts—more remote-work friendly cities like Seattle, Boston, and San Francisco—are digging their heels in, keeping steadily low in-office days, despite adding more jobs. “There is likely a significant culture shift at play,” Romito said.

Indeed, the work-from-home picture has become more and more fragmented in different U.S. cities, the report said. New York, Los Angeles, and Washington, D.C., are leading the return pack, while Boston, San Francisco, and Seattle trail behind.