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ew York City has taken the lead in office demand recovery, surpassing its pre-pandemic benchmark in the fourth quarter with a remarkable 25.3% year-over-year growth. The city's robust demand from tech and finance sectors drove this surge, according to the VTS Office Demand Index (VODI). This index tracks new tenant tour requirements of office properties in core U.S. markets, providing an early indicator of upcoming leasing activity.

    While New York City stands out with a VODI of 94, other markets are also showing signs of recovery. San Francisco led the way with a 32.4% annual growth rate, driven by tech tenants re-entering the office space after years of remote work dominance. Chicago and Seattle are experiencing slow but steady growth, with annual rates of 15.6% and 14.7%, respectively, as employers adopt hybrid work models.

    "New York City's shift back to in-office work reflects its unique cultural and economic dynamics," said Nick Romito, CEO of VTS. "Other markets like San Francisco, Chicago, and Seattle are navigating the complexities of hybrid work, seeking a balance that aligns with their workforce needs."

    National office demand defied seasonal trends, increasing by 12.3% in Q4 2024. The national VODI has climbed from its post-pandemic low to a total growth of 39.1% over two years. This quarterly rise is significant, as the national index typically declines in the fourth quarter.

    "The data shows that while some markets 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 for defying seasonal expectations and emerging in a cooling labor market."