Yep, have a look <a href="https://support.steampowered.com/kb_article.php?ref=3160-AGCB-2555">here</a>; you'll see that you can only switch to offline mode from a logged-in, online Steam session.

I've never, on any computer, been able to activate offline mode on a computer without internet before (though once you switch to offline mode you can henceforth start steam in offline mode).

Frustrating when you have a game with zero online content, on disc, which you paid $70 for and you can't play it because Steam decides you need some arbitrary update which may not even exist. If the retail version of the game is unplayable without updates then what're they even selling it on disc for!?