New York City Office Demand Surpasses Pre-Pandemic Benchmark, Leads all Major U.S. Office Markets

NEW YORK –  New York City has emerged as the leader in the ongoing office demand recovery, surpassing its pre-pandemic benchmark in the fourth quarter. The city experienced a remarkable 25.3 percent year-over-year growth, driven by robust demand from the tech and finance sectors, according to the quarterly VTS Office Demand Index (VODI).

The VODI tracks unique new tenant tour requirements of office properties in core U.S. markets and is the earliest available indicator of upcoming office leasing activity as well as the only commercial real estate index to explicitly track new tenant demand.

While New York City is the clear winner of 2024, ending the year with a VODI of 94 after briefly topping 100 (the pre-pandemic benchmark) in November, several other markets also demonstrated varied but encouraging signs of recovery. San Francisco, for instance, led the way with the highest annual growth rate among VODI markets at 32.4 percent, driven by a resurgence in activity from tech tenants who are re-entering the office space market after years of remote work dominance. Meanwhile, Chicago and Seattle are experiencing slow but steady growth, with annual growth rates of 15.6 and 14.7 percent, respectively, as employers in these cities increasingly embrace hybrid work models that require consistent in-office presence.

“New York City’s shift back to in-office work reflects the city’s unique cultural and economic dynamics, especially in the finance and tech sectors,” said Nick Romito, CEO of VTS. “At the same time, other markets like San Francisco, Chicago, and Seattle are navigating the complexities of hybrid work, seeking the right balance that aligns with their workforce and industry needs. These markets demonstrate that this is not a uniform rebound — it’s a nuanced evolution shaped by local market dynamics.”

National demand for office space defies seasonal trends

The VODI increased by 12.3 percent nationally in Q4 2024, marking a significant quarterly rise. Over the past two years, the index has steadily climbed from its post-pandemic low of 46 in December 2022 to 64 in December 2024—a total growth of 39.1 percent. This quarterly increase is particularly significant, as the national VODI has historically declined by 2.5 percent in the fourth quarter of the year. At its current growth rate, the VODI could reach its pre-pandemic average (from 2018-2019) within approximately four years.

“The data shows that while some markets, like New York City, are rapidly returning to traditional office settings, the national picture reflects slow but steady progress,” said Ryan Masiello, Chief Strategy Officer of VTS. “This growth is notable — not only for defying seasonal expectations, but for emerging in the midst of a cooling labor market. Businesses appear more willing to invest in office space despite economic uncertainty, signaling a shift in confidence and long-term planning.”

Q4 2024 VTS Office Demand Index (VODI)