New demand for office space in core markets—measured by tenant tours of properties across the country—increased by 21%, or seven index points, in January 2021, a rate that's on par with previous years but still smaller than it was pre-pandemic. But recent research by VTS shows that local COVID-19 caseloads are no longer the same demand driver they were.

The VTS Office Demand Index shows that office demand nationally was at 40 index points, as compared to 99 points year-over-year. By way of comparison, demand activity was at 100 in January 2018, a time that was relatively stable for office leasing.

Markets hit hard by COVID typically experienced a dramatic bottoming out in early spring 2020, but those cities with the highest increase in cases over the last three months actually saw demand increase the most. VTS posits that demand in local markets is more related to hyperlocal near- and long-term factors like job growth, vaccine rollout, and public health safety measures.