New analysis from the VTS Office Demand Index (VODI) shows that office demand skyrocketed in March.
The data found that demand rose 28% from February and 161% in the entire first quarter. Now, demand for office space is just 9% below pre-pandemic levels. At this pace, demand in April could meet or even exceed pre-pandemic rates.
Half of major markets, which include Chicago, Los Angeles, San Francisco and others, have exceeded or are within 5% of pre-pandemic levels. Some of these markets have a VODI within 10% of or above their historical average.
The first quarter saw major traction across cities like San Francisco, among the hardest hit during the pandemic, which saw a 276% quarter-over-quarter VODI growth. Although in the four months leading up to the pandemic San Franciso saw demand fall, it has rebound to levels that have not been achieved since October 2019.
Similarly, New York City also saw its VODI fall by 121 index points from March to May 2020. However demand has since grown, and as of March of this year, its VODI is 13% below the 2018-2019 average.
“The turnaround has truly been remarkable and is a testament to the resiliency of our country in the face of disaster,” said Nick Romito, CEO of VTS in prepared remarks. “Based on current momentum, I fully expect demand to continue to rise, although we should start to see incremental growth slow as we meet and then exceed pre-pandemic demand levels.”
