A resurgence in venture capital funding—particularly across the tech and AI sectors—is stirring new optimism for office demand and hiring in 2026, according to Avison Young's latest U.S. Office Market Report. The firm says the current market shows echoes of the 2014–2018 tech boom, with San Francisco and Manhattan leading early signs of recovery.
Last year, venture capital investment grew 27% year-over-year, driving renewed leasing activity even as national totals remained below historic levels. Across the U.S., tenants leased roughly 278 million square feet of office space in 2025—a 9.6% drop from 2024's 307 million square feet and 13.6% below the pre-pandemic 10-year average of 321 million.
Yet momentum was clear in key tech markets: San Francisco posted a 40% year-over-year increase in leasing, while Manhattan saw a 7.7% gain. Both still trail pre-pandemic averages, but by narrower margins—14% and 3%, respectively. Boston also recorded a year-over-year gain of just over 20%.
Avison Young reported $45.8 billion in office loan originations in 2025, up 92% from the prior year. Trophy and Class A assets made up about 70% of those loans—continuing a trend that began in 2024 as lenders concentrated on top-tier buildings.
Danny Mangru, senior manager and U.S. office lead for market intelligence at Avison Young, tells GlobeSt.com the current environment feels reminiscent of the last tech expansion cycle.
"During that time, too, you had a lot of tech startups," Mangru says. "Ten years later, we're kind of seeing that same thing. The venture capital funding is starting to increase right now, and it's primarily concentrated within tech and AI."
He adds that, similar to a decade ago, much of the activity is starting on the West Coast and moving eastward. "It's starting in San Francisco and making its way to Manhattan right now," he says, predicting that the trend will continue to spread through other major gateway markets in 2026.
Mangru notes early leasing indicators suggest this momentum could strengthen in the first half of the year.
"Q1 and Q2 are definitely going to be tell-telling for us, right, to see how much of that tech leasing," he predicts. "Anecdotally, I can tell you, at least dealing with clients, particularly in that tech AI side, they're looking for expansions of their real estate. Even some of these start-ups that are remote are looking for an office presence right now."
While not every venture-backed startup will endure, Mangru points to encouraging labor trends. Job postings tied to the sector have risen three- to fourfold over the past 12 to 18 months—a signal, he says, that hiring and space needs are likely to follow.
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