Demand for New York City Office Space Returns to Pre-Pandemic Levels
New York City’s office space market has finally reached pre-pandemic levels, driven by a surge in new workers and a push by employers to get current employees back into the office. According to VTS, a company that tracks office demand, the city’s office demand jumped 25% in the fourth quarter compared to the previous year.
SL Green Realty Corp., a real estate investment trust, reported that the city’s Office of Management and Budget is forecasting 38,000 new office-using jobs in 2025, mostly in the finance, business services, and information technology sectors. This is expected to lead to a significant increase in demand for office space, with SL Green projecting over 93% leased occupancy in the coming year.
Tech giant IBM recently signed a lease expansion at One Madison Avenue, increasing its total footprint at the property to over 362,000 square feet. The expansion is seen as a vote of confidence in New York City’s office market, which is expected to continue to tighten in 2025.
While New York City is the clear winner in the office recovery, other markets are also showing improvement. San Francisco saw a 32% annual growth rate in demand, while Seattle and Chicago saw growth rates of around 15% each. Nationally, demand in the fourth quarter was up 12% from the previous quarter, a notable increase considering the typical seasonal decline in demand.
The data suggests that businesses are becoming more willing to invest in office space despite economic uncertainty, signaling a shift in confidence and long-term planning. As the national office market continues to recover, New York City is poised to remain a leader in the trend towards a return to traditional office settings.
