Amid Major AI Boom, Office Demand in the Tech Industry Emerged as the Nation’s Primary Growth Driver in 2025

At year-end, tech-dominated markets such as Seattle and San Francisco saw annual growth in demand nearing 50 percent, with much more muted growth nationally, according to the Q4 VTS Office Demand Index (VODI) report

NEW YORK--(BUSINESS WIRE)--After years of sluggishness due to persistently high levels of remote work brought on by the COVID-19 pandemic, office demand in the tech sector surged in 2025 and was the primary driver of growth nationally, according to the latest VTS Office Demand Index (VODI) report. Most notably, the tech-dominated markets of Seattle and San Francisco experienced meteoric rises in office demand, with both markets seeing year-over-year growth near 50 percent, up 46 and 45 percent, respectively. The spike in tech-driven demand comes as the industry continues to experience a major boom led by companies in the AI space.

The tech-driven increase in demand masks muted growth nationally. Looking at the larger office market across all industries, demand was up six percent over 2024 levels. This contrasts sharply against the steep rise of tech demand nationally in 2025, up 87 percent on an annual basis. The tech industry by-and-large was the determining factor of fortune when looking at office demand levels from city-to-city in 2025, with all markets – other than Los Angeles and Boston, seeing double-digit growth north of 50 percent in tech demand. In many markets, such as New York, this masked declines in other industries and kept markets insulated from larger dips.

“Red-hot growth from tech companies in the AI space defined office demand for the year, with cities that are major tech hubs, such as Seattle and San Francisco, benefitting the most, and as a result saw office demand swell considerably,” said Nick Romito, CEO of VTS. “However, the story doesn’t end there, with five of our seven markets seeing annual tech demand increases of 50 percent or more. The tech renaissance really is the standout headline of the year, especially considering the industry’s continued inclination towards remote work in recent years.”

Locally, New York still stands as the strongest market overall, with a VODI of 77 (equating to 77 percent of its pre-pandemic demand average), with San Francisco now standing in second place with a VODI of 68. San Francisco’s spectacular year of demand has catapulted it to the second-best performing market nationally. Seattle, although experiencing the highest year-over-year growth, is still second from the bottom with a VODI of 48, due to it coming off a low base given its poor levels of office demand in recent years. Chicago led the pack in terms of quarterly growth in Q4, and finished the year with a strong 43 percent rise in demand versus 2024 levels. Boston is in a distant last place with a VODI of 38, and was the market that experienced the sharpest decline in the fourth quarter – down 32 percent, although finishing the year with double-digit growth of 15 percent. Boston is also one of only two markets that didn’t experience an increase in tech demand in 2025.

“Given tech is the only industry that saw double-digit growth in demand, this produced divergent fortunes market-by-market in 2025, with those coming out on top having a large share of tech companies riding the AI wave,” said Ryan Masiello, Chief Strategy Officer of VTS. “What's striking is how quickly these deals are moving — AI tenants are scaling faster and committing to larger footprints earlier than we've seen in previous cycles, which is compressing timelines and pushing landlords to rethink how they bring space to market.”

	National	BOS	CHI	LA	NYC	SF	SEA	DC
Current VODI (December/Q4)	66	38	66	63	77	68	48	65
Quarter-over-Quarter VODI Change (%)	-8.33%	-32.14%	50.00%	10.53%	0.00%	-46%	-27.27%	35.42%
Quarter-over-Quarter VODI Change (pts.)	-6	-18	22	6	0	-58	-18	17
Year-over-Year VODI Change (%)	6.45%	15.15%	43.48%	8.62%	-15.38%	44.68%	45.45%	32.65%
Year-over-Year VODI Change (pts.)	4	5	20	5	-14	21	15	16

About VTS
VTS is the industry's only AI-powered technology platform that unifies owners, operators, brokers, and their customers across the commercial and residential real estate ecosystems. In 2013, VTS revolutionized the commercial real estate industry’s leasing operations with what is now VTS Lease. Today, the VTS Platform is the largest first-party insights and collaboration engine in the industry, transforming how strategic decisions are made and executed by real estate professionals across the globe.

With the VTS Platform, consisting of VTS Lease, VTS Market, VTS Activate, and VTS Data, every stakeholder in real estate is given real-time market information and workflow tools to do their job with unparalleled speed and intelligence. VTS is the global leader, with more than 60% of Class A office space in the U.S., and 13 billion square feet of office, residential, retail, and industrial space is managed through our platform worldwide. VTS is utilized by over 45,000 professionals and over 1.2 million total users, including industry-leading customers such as Blackstone, Brookfield Properties, LaSalle Investment Management, Hines, BXP, Oxford Properties, JLL, and CBRE. To learn more about VTS, and to see our open roles, visit www.vts.com.