There were more companies searching for office space in New York City in November than there were before the pandemic, according to a new report from office leasing proptech firm VTS.
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The VTS Office Demand Index, which tracks new tenant tour requirements, grew 25.3% year-over-year in the fourth quarter for New York City. Demand surpassed the prepandemic benchmark — an average of the two years before March 2020 — in November before ticking down just below it again in December.
Tenant interest is stronger in New York City than anywhere else in the country, according to VTS. Leasing interest was primarily driven by the tech and finance sectors.
VTS’ findings of increased appetite for office space show there is still momentum after a banner close to 2024 for Manhattan commercial buildings. Last year was the most active since the onset of the pandemic, with a 22.4% increase in leases inked compared to 2023, according to Colliers.
Total leasing in the fourth quarter was 18.3% higher than the previous quarter and was the strongest quarterly volume in Manhattan’s office market since Q4 2019.
Similarly, VTS found that demand surged in Q4, up 54.1% from Q3.
Interest in office space surged in November after the economy received more clarity about the future when President Donald Trump won the election over then-Vice President Kamala Harris.
Nationally, the index closed the year 16.4% higher than a year before and 39.1% higher than two years before. But other cities are far behind the Big Apple in their recovery: VTS estimates that it would take the country four more years to return to prepandemic leasing levels at the current pace of growth.
“This is not a uniform rebound — it’s a nuanced evolution shaped by local market dynamics,” VTS CEO Nick Romito said in a statement.
San Francisco recorded positive Q4 office absorption for the first time since late 2019, according to a Cushman & Wakefield report. That was led by robust venture capital action, which drives the city’s economy.
San Francisco has already seen a resurgence in activity from tech tenants reentering the market, according to VTS. The city had the highest annual growth rate among markets covered by the index, at 32.4%.
Chicago and Seattle had annual growth rates of 15.6% and 14.7%, respectively, indicating steady growth.
But some markets saw interest fall compared to 2023. In Los Angeles, the VODI dropped 11.6%. In Boston, it declined 5.1% year-over-year.
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