Office demand reaches highest post-pandemic level in the first quarter of 2026

Office demand climbed to the highest level since before the Covid pandemic in the first quarter, according to data from the VTS Office Demand Index.

That measure rose 18% quarter over quarter and 13% year over year. It was the strongest reading of the post-pandemic era, with leasing activity fueled by the tech sector’s AI expansion and renewed demand from finance and legal tenants.

Demand grew even as the workforce continued to shrink. Office-using employment declined 0.5% year over year and remains down 2% since the end of 2022.

These findings suggest that companies may be increasing in-office expectations and space utilization even as the ranks of workers are reduced. Employers appear to have greater leverage to push return-to-office policies, helping to drive higher office utilization.

San Francisco and New York again stood out as leaders in the first quarter, alongside a resurgent Los Angeles. San Francisco posted the most dramatic gain, with demand surging roughly 70% quarter over quarter.