During the past 12 months, demand for office space surged in cities driven by the tech sector, indicating that tech employers are revisiting their office space needs and considering policies that could require employees to return to the office in some capacity, whether part-time or otherwise.

This is a meaningful shift from a sector that once significantly lagged behind all other industries due to the prevalence of hybrid or fully remote work and, until recently, the broader acceptance of a total return to the office, according to the quarterly VTS Office Demand Index (VODI).

The VODI tracks unique new tenant tour requirements of office properties in core U.S. markets, and is the earliest available indicator of upcoming office leasing activity as well as the only commercial real estate index to explicitly track new tenant demand.

In recent years, demand for office space in markets less reliant on the tech industry surged, with some like Los Angeles and New York City, even getting within the realm of pre-pandemic normal. Meanwhile, the tech-heavy markets of Seattle, San Francisco, and Boston consistently underperformed, until this past year.

On an annual basis, new demand for office space is up 114.3, 31.4, and 25 percent in Seattle, Boston, and San Francisco, respectively — the highest of all cities tracked — while its counterparts in the less tech-reliant markets of Chicago, Los Angeles, and New York City are up just 14.9, 8.1, and 3.4 percent, respectively.

The tech market surge, coupled with slowed paces of growth in non-tech markets, has narrowed the demand gap between remote and less remote-friendly cities. In January 2024, the two had a 27 VODI point difference. Since then, the drop has declined nearly every month; today, it sits at 11.

“Tech giants like Amazon, Salesforce, and Apple are making strategic moves toward bringing employees back to the office, following months of careful planning and office space evaluations,” said Nick Romito, CEO of VTS. “The VODI data reflected this shift starting in early-2024, and the trend shows no sign of slowing down. I anticipate more companies will announce their return-to-office plans in the coming quarters.”

Nationally, demand for office space increased 11.8 percent from Q3 2023 but is down 8.1 percent from Q2 2024. The quarter’s modest decrease in demand is typical of the third quarter.

Locally, demand for office space was up in all markets tracked except for Washington, D.C. At a VODI of just 35, Washington, D.C. had the lowest demand for office space, which is likely due, in part, to employers waiting on the election outcome before deciding on how much, if any, office space they’ll need for the next presidential term.

“Each city has its own unique factors driving or stalling office demand, and the Q3 VODI captures that complexity,” said Ryan Masiello, Chief Strategy Officer of VTS. “Washington, D.C. stands out as the only market where office demand has significantly declined, and it’s no surprise that the upcoming presidential election is causing some hesitancy among tenants. On the flip side, major markets like Los Angeles and New York City continue to hold the top spots for office demand, even with a recent cooling, underscoring their enduring appeal with employers.”

Cushman & Wakefield served as the exclusive advisor to the joint venture of Grandview Partners and TRG Development in the procurement of $99.8 million of financing for a newly constructed industrial park totaling approximately 1.64 million square feet in Wilmer, Texas, a suburb of Dallas.

Known as Core45, the project delivered in Summer 2024. Current ownership had acquired the ±88.4-acre site in December 2021 and commenced construction on the property in March 2022. The refinancing loan provided by Benefit Street Partners was used to take-out the construction loan at more favorable terms.

Comprising two industrial, manufacturing and distribution buildings, the property is strategically located along the heavily traversed I-45 corridor within the coveted South Dallas submarket, one of the fastest growing industrial markets in the Dallas MSA with efficient access to metro Dallas and major distribution hubs across the U.S. The property is 18% pre-leased to Owens Corning, an Ohio-based provider of roofing, insulation and composite materials.    

The Cushman & Wakefield Equity, Debt and Structured Finance team was led by Rob Rubano, Brian Share, Michael Zelin, Max Schafer, Billy Coyle, and Nikola Kretschmann. Additionally, the firm’s Industrial Advisory Group led by Jim Carpenter, Jud Clements, Robby Rieke, and Trevor Berry provided local market advisory.

Core45’s two state-of-the-art industrial buildings of 616,449 sf and 1,027,630 sf are designed to meet the needs of modern industrial users including ideal truck courts, ample auto and trailer parking (900 auto stalls), 40’ clear heights, approximately 4,000 square feet of speculative office space, ESFR sprinklers, and cross dock loading. The buildings are designed with flexibility to accommodate a wide range of tenant sizes, including multi-tenant or full-building users. Each building can be reconfigured for tenants seeking spaces of 300,000 sf or more, enabling the property to attract a wide range of tenant types and size requirements.

SPI Advisory acquired Winsted at White Rock, a 314-unit Class-A garden-style multifamily property in the affluent Lakewood neighborhood of Dallas.

This marks SPI’s 49th acquisition in DFW since its founding in 2014.

Built in 1996, Winsted at White Rock is well-maintained and was only partially renovated by its previous owners, representing a significant value-add opportunity. To effectively compete with newer construction in the area, SPI plans to fully renovate the remaining classic units to a premium level, enhance common areas and amenities, and finish installing washers and dryers in all units.

Located in the highly sought-after Lakewood neighborhood, the property is zoned to Lakewood Elementary, one of Dallas’ top-rated schools, and is within walking distance of White Rock Lake and the Dallas Arboretum. With an average household income of $194K within a one-mile radius, and an average Lakewood home list price of $1.9M, the area’s demographics reflect its affluence and strong market demand. These location benefits, combined with the submarket’s limited new development due to high barriers to entry, made this investment highly attractive.

 JLL Capital Markets arranged the sale of Katy Green, a 14,920-squre-foot shopping center in Houston, Texas.

JLL represented Wile Interests, Inc., the seller, in the transaction and secured a private investor as the buyer.

Strategically positioned at 19227-19235 Katy Fwy. at Greenhouse Road, Katy Green Shopping Center benefits from its hard corner location adjacent to I-10, which experiences an average daily traffic of over 200,000 vehicles. Moreover, the rapidly growing population base surrounding the center provides a consistent flow of local customers, ensuring steady traffic throughout the day and evening. The presence of well-known, national tenants such as Starbucks and Potbelly further enhances the retail complex’s appeal.

Houston’s retail market is robust, driven by a diverse and expanding population that fuels demand for retail spaces. In this thriving West Houston/Katy Corridor sub-market, with a 96% retail occupancy rate, limited new development helps maintain strong fundamentals and high tenant retention.

The Katy submarket boasts strong economic fundamentals, with an average household income of $127,246 within a one-mile radius of the property and a thriving job market featuring over 120,000 jobs across diverse industries as well as over 13,000 companies. Constructed in 2013, Katy Green is a part of the 16-acre mixed-use retail and office campus, the only such mixed-use campus in the Energy Corridor/Katy sub-market. This well-established center boasts an impressive 100% occupancy rate, reflecting its prime location and diverse tenant mix.

Katy Green attracts versatile clientele, comprising both local residents and daytime office workers who frequent the area. Katy Green boasts an ideal location in the heart of the Energy Corridor and is surrounded by high-growth residential communities. Residents are not only attracted by the top school districts in the region, but they also enjoy a superior quality of life with numerous parks, museums, golf courses and housing at a variety of types and price points.

JLL Capital Market’s Investment and Sales Advisory team was led by Senior Managing Director Ryan West, Senior Director John Indelli and Analyst Gianna New.

Partners Real Estate announced that Evergen Equity has successfully acquired an industrial outdoor storage project in Southwest San Antonio’s manufacturing hub.

Partners, which was already actively involved in the leasing of the property, will continue its role under the new ownership, ensuring seamless operations and strategic growth.

The acquired property, located at Speedway Park, Von Ormy, Texas, includes approximately 26 acres tailored for industrial use, making it a significant addition to Evergen Equity’s portfolio. This area, noted for its limited IOS supply, is adjacent to major manufacturing facilities including Toyota Motor Corporation, Navistar Inc., and JCB, which have recently invested over $1 billion into local operations.

Troy Marcus, Evergen Equity’s Founder expressed enthusiasm about the acquisition, stating, “This strategic purchase not only expands our footprint in a key manufacturing zone but also enhances our portfolio with a high-potential industrial outdoor storage assets from the Port of Los Angeles to the Port of Savannah. We are pleased to continue our partnership with Partners Real Estate to manage the leasing aspects, ensuring top-tier service for our tenants and maximized asset performance for the community.”

The property features a comprehensive setup including a 7,500 sq. ft. truck terminal with office space and service bays, and a large, stabilized yard, making it ideal for supporting high-volume industrial activities.

RangeWater Real Estate and equity partner Harbert US Real Estate acquired an expansive residential community in the growing Round Rock submarket of Austin, Texas.

The joint venture purchased Rock Springs Duplexes located at 1338 Christopher Ave in Round Rock. The acquisition is part of rental housing industry leader RangeWater’s strategy to continue meeting housing demand by purchasing communities in desirable neighborhoods across the Sun Belt. The acquisition price was not disclosed.

RangeWater continues to look for new land sites and existing properties throughout the Austin-Round Rock MSA market. The company currently manages over 2,300 units across Texas, and this will be its third asset in the Austin metropolitan area.  Their most recent development, The Darby, completed in 2024, is a 350-unit multifamily project located in Manor, a suburb of North Austin.  RangeWater will serve as property manager for Rock Springs Duplexes.

Rock Springs Duplexes features 108 three-bedroom, two-bath, and 42 three-bedroom, 2.5-bath homes, ranging from 968 to1,280 square feet. Built in two phases (Phase I in 1985 and Phase II in 1996), the unique style duplexes feature high-end finishes throughout the residences. Each home features an attached direct-access garage, driveway parking space, full-sized washers and dryers, and a private fenced backyard. 

The expansive floor plans include separate dining and living areas; modern kitchens featuring quartz countertops, black appliances, kitchen tile backsplash, gas stove-top and oven, ceiling fans, and wood plank vinyl flooring. Rock Springs Duplexes amenities include a fitness center with cardio and free weight equipment, a coffee bar and a community kitchen.  RangeWater will make minor improvements to the property to maintain a competitive edge over neighboring communities in Round Rock.

Situated in the rapidly growing suburb of Austin, Rock Springs Duplexes benefits from strong employment growth from Round Rock and North Austin.  The residential community is just a five-minute drive from Dell’s headquarters, which employs over 14,000 people. Additionally, major companies like Apple and Samsung have invested billions in new corporate campuses in the area. Just 15 minutes from the property, the 3.3 million square foot mixed-use project, Parmer Austin, is expanding and attracting businesses such as Home Depot, 3M, and IBM, along with Austin FC’s practice facility. The area also features The Pitch, which offers a variety of bars, restaurants, two 18-hole mini golf courses, and pickleball courts.