05/28/2026
Despite ongoing geopolitical tensions and continued economic uncertainty in the U.S., the demand for office space is accelerating in many markets, according to multiple national real estate data providers. That demand extends to Southern California as well, corroborated by Voit’s research and boots-on-the-ground broker observations in our Q1 market reports. The boost in demand is driven by a host of factors, including companies tightening RTO policies, a flight to quality as new office construction slows, and a selective surge in hiring for roles in AI, cloud computing, and cybersecurity.
Office Demand Statistics
• Yardi Matrix reports: national office vacancy rate decreased to 17.8% through March - 210 basis points lower than in Q1 2025.
• VTS Office Demand Index reports: national office demand increased by 18% from the close of 2025 - 13% YOY
• San Francisco demand jumped by 70% Q4 2025 to Q1 2026 - 124% YOY
• Los Angeles demand reach its highest level since Q2 2024- 20% quarter-over-quarter increase
Ryan Masiello, Chief Strategy Officer of VTS cautions, “Despite the national surge, the local picture city-to-city remains quite nuanced. The AI boom continues to be a dominant headline for office, and markets that lack a major tech presence, or are without a primary growth lever in another industry, are seeing declines in demand.”
While vacancy remains well above historical norms in the San Diego and Orange County office markets, demand is increasing in both markets. For additional information on these markets, read the full article at https://f.mtr.cool/wvrxwoaxlr
