Copyright View the Space, Inc. 2026
METHODOLOGY
VTS Office
Demand Index
(VODI)
Quarterly Report
Get a pulse on what’s happening in the market today.
Explore nationwide trends
Annual gains still going despite year end deceleration
NATIONAL
KEY TAKEAWAYS
NATIONAL TRENDS
LOCAL TRENDS
METHODOLOGY
COMPANY
January 2026
National
Local
KEY TAKEAWAYS FROM THIS REPORT
The Tech Leaders: Tech demand was the year’s defining factor for distinguishing clear leaders from the rest. San Francisco and Seattle both finished 2025 with a dominant near 50 percent year-over-year increase in their VODI figures, directly tied to the tech surge witnessed nationally. Markets like Chicago and Washington, D.C., which have seen inconsistent gains from their core sectors had VODIs driven higher from the uptick in tech demand. New York held steady quarter-over-quarter, with robust tech demand helping balance softer performance from other industries.
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The 2025 office market experienced a modest year-over-year rise in demand, largely attributed to significant tech demand increases across several markets. Nationally, the VTS Office Demand Index (VODI) ended the year at 66, representing a six percent year-over-year increase. While demand faced seasonal and cyclical headwinds in the final quarter, declining eight percent versus Q3, the 12-month trajectory was one of progress, with demand consistently flowing in at roughly two-thirds of its pre-pandemic pace. This annual growth was fundamentally driven by the national tech sector, which had a remarkable 87 percent year-over-year surge in requirement demand.
This growth comes despite a complex interplay of a cooling labor market, continued shift in work models, and late-year monetary policy changes. The Federal Reserve's late-year rate cuts seek to support a labor market where the unemployment rate hit 4.4 percent by year-end and office-using employment was down from the previous year. However, in tech-centric markets, a decline in telework and rise of the AI sector provided critical tailwinds for physical office demand, as tech companies benefitting from the AI boom experienced rapid growth.
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Pre-Pandemic
The Reset
The Crash
The Recovery
The Trough
New demand for office space over the pandemic: An illustration
Is demand finally thawing?
From January 2018 to March 2020, new office demand fluctuated around a level of 100. In some cities, there was a noticeable downward trend in advance of the pandemic: Chicago, Los Angeles, Seattle; in the other cities the VODI was more ambiguous as to whether it was flat or slightly upward trending.
Pre-Pandemic
In Spring 2020 new office demand fell sharply to the “pandemic low.” Nationally, the VODI fell from 84 in March 2020 to 12 in June 2020, a decline of 86 percent. In some cities the sharp fall was followed by a quick v-shaped rise (New York City and Los Angeles); In others, there was a prolonged u-shaped trough (Washington, San Francisco, Boston, Chicago, and Seattle).
The Crash
From June 2020 through the end of that year, new office demand generally remained very low. In some cities, such as Boston, Chicago and Washington, D.C., the VODI remained more or less flat during this period. In others, such as San Francisco and Seattle, and most notably in New York City and Chicago, this period saw new office demand begin to recover, foreshadowing the phase that was to follow.
The Trough
After vaccines were introduced in early 2021 a sense of return-to-normalcy pervaded. Nationally, the VODI rose from 33 in January 2021 to 85 in June 2021, as demand that had been waiting on the sidelines during The Trough entered the market all at once in a short period. Once that pent-up demand was spent, the VODI quickly subsided.
The Reset
After October 2021, the VODI seemed almost stagnant. It eventually bottomed out at the end of 2022 and has been gradually recovering since then.
The Recovery
Remote work declined modestly in 2025 as return-to-office mandates continued to expand. The percentage of workers who teleworked fell marginally to 22.4 percent, down from 22.8 percent in the previous year. Additionally, the percent of working days done at home hit a post-pandemic low of 27 percent, marking another consecutive year of declines. This signals that while remote work levels still have some staying power relative to before the pandemic, the demand from more employers to have in-office work continues to increase steadily.
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Traditional centers: New York, Chicago, and Washington, D.C.
Markets in Focus
New York finished the year with a VODI of 77, holding flat for the quarter but down 15 percent year-over-year. Large double digit gains materialized in the tech and legal sectors during the year, as it was unable to fully overcome a significant annual decline in demand from its traditional finance industry.
12 month change in VODI
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The Rest: Boston and Los Angeles both improved year-over-year, but neither rode the tech wave. Boston's gains came from professional services and creative (an unusual bright spot), while Los Angeles leaned on healthcare and legal. LA's creative sector, in contrast, remains depressed and continues to cap the market's upside.
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Boston
Chicago
Los Angeles
New York
San Francisco
Seattle
Washington, D.C.
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The VTS Office Demand Index (VODI) report is a free public-facing analysis based on VTS Data from the previous quarter, capturing office demand in the nation's seven gateway markets. Our VTS Data product includes comprehensive in-depth analytics of numerous benchmarks in over 30 markets across the U.S., the U.K., and Canada. For more information on what VTS Data can provide you, please connect with our team below.
The national VTS Office Demand Index (VODI) finished 2025 at 66. An eight percent decline from Q3 2025, but still growing six percent year-over-year. All despite a decline in office-using employment since the same time last year. This quarterly cooling coincides with a labor market that was already moderating with the unemployment rate at 4.4 percent, up 30 basis points from December 2024. While a cooling labor market typically reduces office demand, it simultaneously increases employer bargaining power with remote work, allowing firms to mandate more on-site work to offset the drag on demand.
NATIONAL VODI RESULTS
LA finished the year with a VODI of 63, a modest 11 percent quarterly improvement and a 9 percent annual increase. While a late-year uptick in demand came from the legal and healthcare sectors, its annual performance remained hindered by a creative sector that has yet to recover the levels of demand it was seeing immediately after the pandemic.
increase quarter-over-quarter
11%
los angeles
Still lagging behind: Los Angeles
Markets in Focus
The nation’s capital ended 2025 with some momentum, finishing at a VODI of 65, rounding out with a 35 percent gain from last quarter and 33 percent gain from Q4 2024. DC shrugged off any shutdown uncertainty as large tenant demand returned to the market with legal demand continuing to be a bellwether and with tech also seeing solid annual gains. This market will be one to watch if these gains sustain and federal RTO mandates help push demand levels even higher.
increase quarter-over-quarter
35%
washington, d.c.
Chicago was the nation's standout in the fourth quarter, finishing with a VODI of 66 and a 50 percent quarterly surge and 43 percent increase from last year. This rebound was driven by an increase in demand for large-block office space, which recovered significantly from the collapse seen mid-year. These gains were supported by legal but driven in large part by none other than the tech sector.
increase quarter-over-quarter
50%
chicago
decline year-over-year
15%
new york
Read VODI impacts on local markets
The fourth quarter of 2025 was defined by a reordering of local market performance. National averages mask a series of intensely local and disparate stories. The following table summarizes the headline performance of the seven major U.S. office markets tracked by the VODI.
A great divergence in market fortunes
local VODI RESULTS
LOCAL
Tech demand defined the year. The technology sector was the dominant force driving demand in 2025, primarily due to the accelerated adoption of AI. Tech sector demand increased by a substantial 87 percent in 2025 compared to 2024, far surpassing all other industry segments. Five of the seven major markets saw annual tech demand grow more than 50 percent year-over-year.
In contrast, the legal sector, traditionally a significant driver of office demand, held a distant second place. The gap between tech and legal highlights the AI-fueled market activity that defined the 2025 economic landscape. Growth in the tech sector will be something to closely monitor in 2026 for durability as office demand faces multiple crosscurrents working for and against it.
Remote work hits post-pandemic low
Technology leads office demand growth
The year also concluded with a definitive shift in the Federal Reserve's stance, but lower rates have not prevented unemployment from rising, which is now up 30 basis points since December of last year. Additionally, office-using job growth was negative over the trailing 12 months. The softer job market will give employers more leverage to continue to push more RTO which will help cushion any drag on demand from the slower pace of hiring.
Cooling job growth reinforces employer control
Ending the year at a VODI of 48, Seattle recorded a 27 percent quarterly decline. Despite the late-year slowdown, annual tech demand in Seattle remained much stronger than in the previous year. However, Seattle continues to struggle as demand increasingly shifts toward its suburban Metroeast counterpart.
quarterly decline
27%
Seattle
Boston finished 2025 at a VODI of 38, the lowest amongst the top markets nationally. Although the VODI grew 15 percent in Q4 from the same time last year, demand from its core sectors like finance and legal lagged 2024 figures and were down double digits. Demand was supported primarily by the growth from professional services and the creative sector, not traditionally a Boston strength.
increase year-over-year
15%
boston
The market ended the year at a VODI of 68. While this was a sharp 46 percent correction from its Q3 peak, the city remains a standout for annual growth, with overall demand finishing significantly higher than it began the year. Demand from large tenants, which skyrocketed earlier in the year due to AI, slowed noticeably in the final quarter.
percent correction from its Q3 peak
46%
SAN FRANCISCO
The tech-driven powerhouses: San Francisco, Boston, and Seattle
Markets in Focus
VTS is the leading provider of leasing, marketing, asset management, and tenant experience software for commercial real estate landlords, with market share averaging over 80% in core U.S. office markets. The VTS platform captures, aggregates, and anonymizes supply and demand data across all office asset classes and age segments. Due to VTS’ market share and the multiple spaces considered by tenants in a given search, VTS sees 99% of all newly created tenant requirements within the markets it serves. With this unprecedented view, VTS has developed an index, the VTS Office Demand Index, published monthly, to provide landlords, brokers, tenants, and the business community with visibility into a previously opaque segment of the market: real-time tenant demand in the US office leasing market.
The VTS Office Demand Index (VODI) is the earliest look into the health of the office market. The VODI, as an index capturing actual market actions of potential tenants - promises to be a source of greater certainty and the first to actually capture the demand for office space as it evolves during this critical period.
The VODI reflects the total square footage of unique tenant requirements surfaced by touring activity in a given month relative to the total square footage observed in VTS’ expansive network of leasing, marketing, and asset management software. Accounting for the total square footage observed helps distinguish changes in the demand for office space from the growth of VTS’ reach, as well as from changes in the supply of office space, e.g. due to fluctuation in vacancy rates or new construction.
To enhance its interpretation and its comparability across regions, VODI is reported as an indexed value using the 2018-2019 average level as a baseline valued at 100. The index is not seasonally adjusted, but it is smoothed using a 3-month trailing average.
To ensure the viability of VTS data for market insight, VTS suppresses monthly VODI data points informed by less than four customers, as well as all data aggregated prior to January 2018.
The markets referred to in this report correspond to the named cities, not metropolitan areas.
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METHODOLOGY
VTS Office Demand Index (VODI)
ERIC JOHNSON
VTS
eric.johnson@vts.com
Media Contact
January 2026
Copyright View the Space, Inc. 2026
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Changes to the VODI Report
VTS has shifted the cadence of the VODI report from monthly to quarterly and is retiring its standalone Greenshoots Report. The March 2023 VODI report was the final monthly report. The quarterly VODI report will be published in January, April, July, and October capturing data and findings from VTS over a three-month (quarterly) period moving forward. The quarterly VODI report will include select data points from the former VTS Greenshoots report, providing all your need-to-know trends and takeaways for the office market in one comprehensive report.
For questions, data inquiries or to connect with a VTS spokesperson, contact eric.johnson@vts.com.
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