Venture Capital Boosts Tech Office Leasing

Venture Capital Momentum Drives Office Growth

Venture capital investments surged in tech and AI, driving new demand for office space in major US cities, says Globe St. Avison Young reports that San Francisco and Manhattan lead this early rebound, echoing the 2014–2018 tech expansion cycle. Tenants leased 278M SF of office space nationwide in 2025, still below pre-pandemic averages but showing momentum. San Francisco posted a 40% leasing increase year-over-year, with Manhattan and Boston also reporting strong leasing gains.

Focus on Trophy and Class A Assets

Office lending rose in 2025, with loan originations reaching $45.8B—a 92% increase over 2024’s total. About 70% of those loans supported Trophy and Class A properties, as lenders favored high-end, stable office buildings.

This trend began in 2024 and continued in 2025, as investors focused on assets likely to attract tech tenants. Both developers and lenders believe these premium buildings will benefit most from tech’s renewed demand for space.

Early Signs Point to Expansion

Avison Young’s analysts expect the positive momentum to continue into the first half of 2026, with early leasing indicators suggesting further strengthening. Industry specialists note that even remote-first tech startups are starting to reassess their need for physical office space, with many seeking expansion opportunities as hiring surges. This shift reflects broader changes in workforce dynamics, especially as tech companies adapt to new talent expectations and evolving employment models.

Not all venture-backed companies will survive, but the sector’s recent spike in job postings is a strong sign that the latest round of venture capital activity could translate into durable demand for tech office space in core US markets.