New York City has surpassed pre-pandemic office demand levels during the fourth quarter, reaching 25.3% year-over-year growth and leading the country in what appears to be an ongoing recovery within the sector. The city’s office momentum is being driven by robust demand from the tech and finance sectors, according to the quarterly VTS Office Demand Index (VODI), which tracks new tenant tour requirements of office properties in core US markets.
Several other markets showed encouraging signs of recovery, including San Francisco, Chicago and Seattle, VTS said. San Francisco had the highest annual growth rate among all VODI markets at 32.4%, driven by a resurgence in activity among tech tenants re-entering the office space market after years of remote work. Chicago and Seattle are growing at a slower but steady rate, with annual growth rates of 15.6% and 14.7%, respectively. Employees in these cities are increasingly embracing hybrid work models that include a more consistent in-office presence.
“These markets demonstrate that this is not a uniform rebound — it’s a nuanced evolution shaped by local market dynamics,” said Nick Romito, CEO of VTS.
Nationwide, the VODI increased 12.3% during Q4, a significant quarterly increase particularly because the index typically declines during the fourth quarter. The index has increased from its post-pandemic low of 46 in December 2022 to 64 in December 2024, an increase of 39.1%. The firm said the VODI could reach its pre-pandemic average within 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, co-founder and 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.”