DC Employers Among Leaders In Work-From-Home Flexibility During Pandemic: Realtors

WASHINGTON, DC — More than 144 million square feet of rental office space has been given up by tenants across the United States since the start of the COVID-19 pandemic, according to the latest data from the National Association of Realtors.

Employers in the New York City and the Washington, D.C., area are leading the way in letting their employees work from home instead of the office, NAR said in its "Commercial Markets Insight Report," released last week.

Nationwide, office space rents have declined by 0.4 percent as of September compared to a year earlier. D.C. saw its year-over-year office rents decline by 1.2 percent in September, NAR said.

The office sector continues to struggle, "as absorption rates and rents have declined, and many occupied spaces remain largely void of workers," the trade group said.

"Even as the economy makes a steady recovery, the one sector still lagging behind has been the office market," NAR Chief Economist Lawrence Yun said in a statement. "Work-from-home flexibility looks to be the defining shift of the new post-pandemic economy."

As of the second quarter of 2021, 144.3 million square feet of office space was under construction, equivalent to about 2 percent of the existing office space. The association found that the largest construction projects are happening in metro areas that are currently still suffering from declining occupancy: New York, Boston, Seattle, D.C.and San Jose.

For the report, NAR analyzed 390 commercial real estate markets and found a robust recovery across the multifamily, industrial and retail property markets as economic production rebounds to pre-pandemic levels. But the office market is only showing signs of recovery in small to medium markets like Austin, Texas, Boise, Idaho, Chattanooga, Tennessee, Omaha, Nebraska, and Provo, Utah, NAR said.

In the D.C. area, entire offices are shutting down because the companies switched to a remote-only work environment.