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These office markets may see biggest impact from remote-work adoption - Silicon Valley Business Journal

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These office markets may see biggest impact from remote-work adoption - Silicon Valley Business Journal
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Between 2019 and 2021, the number of people primarily working from home tripled from 5.7%, or about 9 million people, to 17.9%, or 27.6 million people, according to recent U.S. Census Bureau data.

It found, between 2019 and 2021, the number of people primarily working from home tripled from 5.7%, or about 9 million people, to 17.9%, or 27.6 million people. That's correlated with a drop in commute time, as also found in the ACS results.

The average one-way travel time to work dropped to 25.6 minutes in 2021, among the shortest times in the past decade and two minutes shorter than the average of 27.6 minutes in 2019.drilled further into work-from-home data, comparing one-year estimates from the Census' 2019 survey to that of 2021. Geographically, some of the nation's economic powerhouse metropolitan statistical areas are also seeing the biggest increases in work from home since the pandemic. While more people were back in the office in 2021 than the first year of the pandemic, there were many fits and starts to going back last year, thanks to case-count spikes from the Delta and Omicron variants. That means work-from-home data as reported in 2021 may not fully reflect what's happening in 2022.Take Boulder, Colorado, the MSA of which had 13.7% of ACS survey respondents in 2019 working from home. That spiked to 36.3% in 2021's survey, with Boulder being the market with the biggest share of survey respondents saying they worked from home nationally, when filtered by MSA. The San Francisco MSA also saw a dramatic increase, from 7.2% in 2019 to 35.1% in 2021. The nearby San Jose, California, MSA had only 4.8% of ACS survey respondents in 2019 working from home, compared to 34.8% in 2021. More data from 2022 and ensuing years will be necessary to determine how far of a reach working from home will have in markets nationally. But it's increasingly clear one of the biggest permanent changes from the pandemic is adoption of remote work. Many markets with the most sizable share of remote workers are tech-oriented, including San Francisco; Denver; Austin, Texas and North Carolina's Research Triangle region. When filtering the 2021 ACS work-from-home data by cities, the biggest share of remote workers are concentrated in a few key areas of the country, including Washington, D.C., the Bay Area, Silicon Valley and the Seattle metro. Redmond, Washington, saw the highest share of reported remote workers in 2021, at 55.2%, among U.S. cities with relevant ACS data. Only 3.7% of ACS respondents in Redmond indicated they were remote workers in the 2019 survey. Mountain View, California, part of Silicon Valley, saw 4.1% of ACS respondents in 2019 working remotely. That jumped to 50.5% in 2021's survey. The growth of remote workers in cities or towns like Redmond and Cary, North Carolina — close to, but not the major city, of a region — could also be correlated with a, especially in the wake of the pandemic and adoption of remote work. The push toward more people working remotely has significant implications for the office markets of MSAs seeing the biggest gains in remote workers, especially city centers. Washington, D.C., is a particularly illuminating example. When filtered by MSA, the region went from 6.3% of ACS respondents working remotely in 2019 to 33.1% in 2021. The share of remote workers in the District itself went from 7.4% in 2019 to 48.3% in 2021, more than any other state or the territory of Puerto Rico. Bethesda, Maryland, and Arlington, Virginia, each had a higher share of remote workers, as recorded in the ACS survey, than D.C. itself — at 54.5% and 48.8%, respectively. Both Bethesda and Arlington are significant office markets. Given D.C.'s economy is largely concentrated in government and business-oriented fields — historically heavy users of office space — the higher share of remote workers, if the trend sticks, will have outsized ripple effects on vacancy and demand. The same is true of other metros seeing big spikes in remote workers. The work-from-home Census survey data somewhat mirrors how return-to-office metrics have fared in 2022. The metro area of Washington, D.C., saw 44.7% physical office occupancy the week of Sept. 14, according to Kastle Systems International LLC data. That was a 4.7% increase from the week prior. Office occupancy the week of Sept. 14 in the San Francisco metro was 40.7%, or 2.3% higher than the week prior, Kastle found. San Jose, California, had the lowest physical occupancy among 10 cities tracked by Kastle — 39.5%, a 5.5% jump from the prior week. It's not certain whether physical office occupancy will continue to rise in the coming weeks. But observers of the U.S. office market and return-to-office believe this year's post-Labor Day office-using activity will be the

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