Demand for office space did not increase across the United States in January and February of this year. This might not seem surprising considering the office sector’s struggles. But it is significant.

Why? This marked the first time in 20 months that demand for office space did not increase on a year-over-year basis during the first two months of the year.

That’s one of the big takeaways from the latest VTS Office Demand Index, a report looking at the state of the U.S. office market during the first quarter of the year.

In better news, though, VTS reported that office leasing activity did rise during March. That helped erase the dip in office lease transactions in January and February. With that surge, office demand rose 4.6% in the first quarter of this year when compared to the same three months in 2024.

What caused the dip in leasing activity in the first quarter? VTS pointed to a growing uncertainty in the economy thanks to recent tensions in global trade. Declining job postings, slower hiring and broader concerns over unpredictable policy shifts likely played a role, too, according to VTS.

In compiling its reports, VTS calculates a single number that encapsulates the level of demand for office space. According to the latest data from VTS, national demand for office space in the United States stood at 68. That number is roughly two-thirds of the national office sector’s pre-pandemic level, showing just how far demand for office space has fallen in recent years.

As VTS points out, Job postings and hiring continued to fall in the first quarter, with job postings declining steadily across nearly all major sectors during the past two years.

The new hire rate — the percentage of employed workers who started their jobs within the past month — has dropped from around 4.5% in early 2022 to about 3.4% as of early 2025, a level not seen since the early 2010s.

“At first glance, a cooling labor market might seem like bad news for the health of the office sector — but the opposite could be true,” said Nick Romito, chief executive officer of VTS, in a statement. “In recent years, hiring surged, but employers had limited leverage to bring employees back to the office. Now, as jobs become harder to come by, employers are in a stronger position to require in-office attendance with less resistance.”

The recent slowdown in office demand is disproportionately impacting New York and Los Angeles, two markets that had previously led the recovery, VTS said. In contrast, cities that have lagged in the broader office market rebound, often due to higher rates of remote work with greater exposure to the tech sector, are now emerging as relative bright spots.

San Francisco, long a hub for the tech industry, which has been especially conducive to remote work, posted the largest year-over-year increase in office demand, with a 32% rise from March 2024.

New York City and Los Angeles were the only markets to record a year-over-year decline in office demand. Demand fell 4.7% in New York from March 2024. Even with that fall, though, the New York City market still boasts the highest overall demand for office space in the country, according to VTS.

Los Angeles saw a dip in office demand of 13% in the first quarter, though it still ranks as the city with the second-highest demand for office space, VTS reported.

Andy Tandon has transitioned into a new role as Vice President & General Manager of Turner Construction’s Data Center / Mission Critical work across Texas, operating within our Advanced Technologies Group (ATG). This move reflects Turner’s long-term commitment to supporting the expanding demand in the data center sector, locally and nationwide. In his 25-year tenure, his leadership has helped shape the Houston office, and this role enables him to focus on one of Turner’s fastest growing markets.

Windy Hill Development welcomes Chris Tysdal as Director of Land. Chris brings extensive real estate analysis, sales and investment experience across Texas markets. He’ll lead land acquisition, management and entitlement for Houston-area residential developments. Chris previously worked with Forestar Development Group, Lennar Homes, and Investment Realty Co. Chris earned a bachelor’s degree in finance and a master’s degree in real estate from Texas A&M University.

Windy Hill Development welcomes Alexander Ryan as Development Manager. He brings expertise in real estate acquisition, development, and financial analysis. Previously, Alexander held roles at Venterra Realty, Vero Sade, CBRE, and InterLinc Mortgage Services. Alexander served in the U.S. Army as an airborne ranger infantryman. He holds a master’s degree in real estate from Georgetown University and a bachelor’s degree in economics from the University of Houston.

Zarin joins the commercial real estate transaction team with twenty-plus years of legal experience specializing in the full lifecycle of ground-up development. Zarin previously served as senior underwriting counsel at First American Title. Her deep knowledge of the title industry and insight into underwriting decisions enhance the value we deliver to our clients.

Zarin received her B.S. degree in architecture from M.I.T in 1998 and her J.D. from the University of Texas School of Law in 2002.

Organizations are facing unprecedented and complex challenges surrounding rising costs, their real estate portfolios, sustainability, attracting and retaining talent, and more. To address these challenges head on, JLL has combined facilities management, technical services, energy and sustainability, and experience and occupancy under its new dedicated Workplace Management (WPM) sub-business line in Real Estate Management Services (REMS).

Led by Paul Morgan, WPM brings together approximately 51,000 facilities management, engineering, experience and mobile technical specialists who can safely and expertly address the dynamic needs of modern organizations and drive greater value for JLL clients. 

WPM takes an advisory-led approach and leans on global and local expertise, standardized delivery, insights and integrating state-of-the-art technology to reposition clients’ real estate portfolios as a value driver versus a cost center.

According to JLL’s Future of Work Survey, 48% of respondents globally identified flexibility, agility and resilience as the second most important skill required for commercial real estate to deliver value by 2030. WPM continues the JLL tradition of implementing a dynamic, data-driven method to integrated facilities management (IFM) and supercharges it with other vital workplace-oriented services to enable swift responses to evolving situations and deliver even more comprehensive solutions to clients.

Morgan selected an impressive slate of leaders to collaborate on solutions that drive results for clients and oversee specific segments of the WPM ecosystem:

• Christian Whitaker,Global Head of Technical Services and Sustainable Operations (TSSO), leads JLL’s integrated maintenance, engineering, energy and sustainability services across critical and common environments. 
• Tim Eldridge, Global Head of HSSEQ (Health, Safety, Security, Environment, and Quality), drives compliance and our culture of safety first and dedication to quality.
• Tim Bernardez, Global Head of Workplace Management Technologies, drives the development of technology-enabled solutions and roadmaps to enhance operational efficiency and improve service delivery. He is also responsible for growing the FM SaaS business, including Corrigo, the world’s leading facilities management CMMS platform, and JLL Marketplace.
• Gabriela Stephenson, Head of Workplace Management Transformation,oversees large-scale organizational change initiatives and leverages data analytics and industry best practices to identify areas of improvement across WPM sub-business line and accounts, in addition to responsibilities as the WPM lead for Canada.
• Peter Jones, Michael Thompson and Sean Greig lead WPM for EMEA, Americas and the Asia Pacific regions respectively, overseeing their regions’ WPM teams to enhance performance and deploy future capabilities to drive growth.
• Wei Xie, Head of Workplace Management Research and Strategy, is responsible for analyzing market trends, determining growth and differentiation opportunities and identifying key industry disruptors to drive the future direction of WPM.

This reorganization of Workplace Management within JLL’s Real Estate Management Services segment is in accordance with previously announced changes in how JLL is reporting financials that took effect January 1, 2025.