San Francisco, New York Top VTS Office Demand Index
Why this matters
Office continues to trade in two distinct markets: trophy assets in walkable submarkets that are leasing at or near record rents, and commodity Class B and C buildings where the basis is still resetting. Underwriting on the latter has moved toward replacement-cost-minus, with credit underwriting now leaning on tenant covenant and remaining lease term rather than mark-to-market expectations. New York continues to bifurcate sharply: trophy office leasing at record rents, commodity Class B in conversion discussions or court-supervised processes. Rent-stabilized multifamily remains supply-constrained and tightly held. For LP-positioned capital, the read-through is that the bifurcation is now a structural feature of the sector, not a cycle to wait out.
Editorial analysis · Real Estate Trail Editorial
On the RET wire
- The 292nd New York story tracked on the wire in October 2026. All New York coverage →
- Disclosed office deal value tracked in October 2026: $22.9B across 69 reported transactions. All Office coverage →
Computed from Real Estate Trail’s own tracked coverage
San Francisco reclaimed the top spot for office demand in the third quarter of 2026, VTS reported Wednesday. The latest VTS Office Demand Index (VODI) shows the city, with a VODI of 87, has gained 21 points since year…
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