NYC Office Demand Jumps 40% in May
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APRIL 2023
After a rough April, May rebounded to March levels with 3.8M sf of new tenant demand, up 40% on a count basis and 147% on a sf basis MoM. Much of this bounce back can be attributed to larger tenants, with some mega users over 100k+ sf entering the market and driving up the total sf.
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NYC Office Demand Jumps 40% in May
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APRIL 2023
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METHODOLOGY
Explore the key drivers below
April Showers Bring May Flowers
After a slow month in April, there was 1.8M sf of new tenant demand from FIRE in May. This is up 315% MoM and nearly 93% from the monthly average in 2021. Over the trailing three months, the finance sector in particular finally saw a positive increase YoY, with the total sf up 4%.
FIRE with a Comeback
Active Demand in May increased 11% MoM to 29.3M sf, the second highest level since the onset of the pandemic, and is 16% above the monthly average in 2021-2022 of 25.3M sf. There was only one month in 2023 so far that was below that level, putting us on track to end the year above the average.
Active Demand Over Time
Downtown makes up 28% of current active proposals (for NYC, Class A & Trophy,10k+ sf, with 60+ month term). This is the highest % of deals Downtown since the onset of the pandemic and up 87% vs. the % share of deals executed YTD '23. Despite having the lowest average starting rent of the three submarkets at $59/sf, Downtown still accounted for the highest % of newer quality buildings, with 80% of the active proposals in buildings built or reno 2014+.
Downtown Sees Some Light
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A look at the latest trends impacting office demand
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REPORT | APRIL 2023
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METHODOLOGY
Copyright View the Space, Inc. 2023
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METHODOLOGY
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.
The VODI report includes analysis and commentary from MetroSight.
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VTS Office Demand Index (VODI)
LAUREN RIEFFLIN
Kingston Marketing Group
lauren@kingstonmarketing.group
ERIC JOHNSON
VTS
eric.johnson@vts.com
Media Contacts
APRIL 2023
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Changes to the VODI Report
VTS will be shifting the cadence of the VODI report from monthly to quarterly and retiring its standalone Greenshoots Report. This means the March 2023 VODI report, scheduled to publish on Wednesday, April 26, will be the final monthly report. The new quarterly VODI report will be published in July, capturing data and findings from VTS over a three-month (quarterly) period moving forward. The new 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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aAPRIL 2023
VTS Office Demand Index (VODI)
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LAUREN RIEFFLIN
Kingston Marketing Group
lauren@kingstonmarketing.group
ERIC JOHNSON
VTS
eric.johnson@vts.com
Media Contacts
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