April Marked Fourth Month Of Office Recovery

The VTS Office Demand Index (VODI) determined that April marked the fourth month of recovery as the office industry slowly approaches its pre-pandemic levels.

The VODI tracks in-person and virtual tours of offices, and at the moment demand is at 15% of the pre-pandemic benchmark.

However, all markets also saw an anticipated deceleration in demand in April. For instance, Los Angeles and Washington D.C. saw demand pull back. On the other hand, New York witnessed its biggest growth in demand during April, growing 16 index points from March.

“If it were any other year, I would be telling you that demand for office space will absolutely pull back in late spring, but this is unlike any other year,” said Nick Romito, CEO of VTS. “Companies are making strategic decisions on when they want to return to work and planning for their future with little regard for the calendar. I expect that it will take at least another six months before the market behaves in a typical manner.”

Chicago has also had an uptick in demand, experiencing an overall growth of 154.8%. Now, the market is above its February 2020 levels. Still, demand remains 21.1% below its pre-pandemic benchmark. 

Overall, while it is clear that tours are increasing in many areas, adjustments to office space requirements are on the horizon. In fact, a survey from MRI Software and CoreNet Global found that 71% of commercial occupiers have altered their approach to space usage.