Holidays and extreme weather conditions prompted a typical seasonal office demand slowdown in December, according to the VTS Office Demand Index (VODI). However, the year-over-year decline for the month was slightly larger than in previous years.
New demand for office space ended the year 31.3 percent below its May 2022 peak and fell 20.7 percent year-over-year to a VODI of 46 in December.
The report said that a tight labor market, layoffs, threats of another COVID-19 variant, and interest rate hikes have "given pause" to prospective office tenants.
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