Cities With More Remote-Friendly Jobs See Slower Office Market Recovery

Seattle, Boston and San Francisco have higher rates of remote-friendly jobs and office demand in those markets has recovered the least; Chicago, Los Angeles and New York have relatively fewer remote-friendly jobs and have had a more pronounced recovery, according to the June 2021 VTS Office Demand Index (VODI) monthly report

NEW YORK–(BUSINESS WIRE)–While COVID-19 cases are no longer an inhibitor of demand for office space, the pandemic has fundamentally changed the way we work, and the effects are being felt in the office leasing market. Markets with a greater percentage of remote-friendly jobs are recovering more slowly while the opposite is true for markets with fewer remote-friendly jobs.

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Some of that change is likely to persist in the interim, with more pronounced implications for cities that have a large share of remote-friendly jobs including Seattle, Boston and San Francisco, consistent with the picture emerging from the VTS Office Demand Index (VODI). The VODI tracks tenant tours, both in-person and virtual, of office properties across the nation, and is the earliest available indicator of upcoming office leases, as well as the only commercial real estate index to explicitly track tenant demand.

In Seattle, Boston, and San Francisco, the share of jobs that are remote-friendly is among the highest in the nation, and not coincidentally those markets have also recovered the least from their pre-pandemic level of demand, still down 39, 43 and 46 percent from their 2018-2019 average, respectively. In contrast, markets with a substantially lower share of remote-friendly jobs, Chicago, New York and Los Angeles, are only down 14 and 15 and 24 percent from their pre-pandemic values, respectively. The figures for remote-friendly job shares are drawn from a study by Apartment List which builds on prior academic work (Dingel & Neiman (2020).

Washington, D.C., an exception to the pattern with a high rate of remote-friendly jobs and a further-along recovery, has a large share of government employers who may be less willing to keep remote work arrangements in place compared to employers in Boston, San Francisco and Seattle.

“The pandemic didn’t just change the way we work, it changed the way we live. Many workers have found value in remote or hybrid work and may be reluctant to go back to the way life was pre-pandemic, said VTS CEO, Nick Romito. “In cities with higher rates of fully-remote jobs, hiring and retaining talent means employers will need to provide choices and flexibility – including fully-remote and fully in-office.”

VTS Office Demand Index (VODI)

 

National

BOS

CHI

LA

NYC

SEA

SF

DC

Share of Jobs that are Remote-Friendly

29%

38%

32%

31%

33%

39%

42%

42%

Pre-pandemic Benchmark* (avg. VODI in 2018-2019)

100

100

100

100

100

100

100

100

May 2021 VODI (current)

75

57

86

76

85

61

54

81

Current Difference from Pre-pandemic Benchmark (%)

-25%

-43%

-14%

-24%

-15%

-39%

-46%

-19%

Year-to-Year VODI Change

+60

+18

+68

+62

+80

+46

+51

+46

Year-over-Year VODI Change (%)**

400%

46.2%

377.8%

442.9%

1600%

306.7%

1700%

131.4%

Month-to-Month VODI Change

-7

-5

4

0

-12

-19

-10

-7

Month-over-Month VODI Change (%)

-8.5%

-8.1%

4.9%

0%

-12.4%

23.8%

15.6%

8%

*The level of the VODI is set so that its average during 2018-2019 equals 100. That level conveniently also serves as the pre-pandemic benchmark, as it reflects the typical level of office demand in the period preceding the pandemic.

**April 2020 was approximately the pandemic trough; exact timing varies by market.

Nationally, following a particularly sharp burst of recovery in early 2021, demand for office space took a breather in May. After rising 173 percent in the first four months of the year, demand for office space receded modestly in May, down 8.5 percent from April, but its level remains 5 times higher than the May 2020 pandemic low. The decline, likely fueled by a seasonal lull and an easing of pent-up demand, marks a reversion to office demand’s normal see-sawing behavior.

“Demand for office space tends to follow seasonal patterns; it should not be concerning that most markets saw demand for office space taper in May,” said VTS Chief Strategy Officer, Ryan Masiello. “Depending on the market, we anticipate that demand will continue to fluctuate this summer before rising again in August and September.”

As of May, more than half of the markets covered were within 25 percent of their pre-pandemic benchmark level–a level that more closely resembles pre-COVID-19 normalcy. All markets, with the exception of Chicago and Los Angeles, saw demand for office space recede in May with Seattle losing the most ground, down 24 percent during the month.

At a VODI of 86, Chicago, a market that has lagged behind all others on the march to recovery, is now the closest of all markets to its pre-pandemic level. Chicago is also the only market to see an increase in demand for office space in May, though the monthly increase has tapered from previous months. Demand for office space in Chicago is propped up by the need for physical space for a higher percentage of roles that are not classified as remote-friendly. In addition, the materialization of pent-up demand in Chicago may have been delayed a bit longer than elsewhere owing to the cold winter climate, which is now providing some extra tailwind in May.

Seattle also has a relatively high share of remote-friendly jobs, which is slowing its office demand recovery. In addition, Seattle was the only city covered by VODI to experience a drop in office-using employment in May. That said, office demand in Seattle has been volatile in the past, and the current decline is modest in comparison to the city’s office demand fluctuations in the years immediately preceding the pandemic.

About VTS

VTS is commercial real estate’s leading leasing, marketing and asset management platform where the industry comes to make deals happen and real-time data comes to life. The VTS Platform captures the largest first-party data source in the industry, which delivers real-time insights that fuel faster, more informed decision making and connections throughout the deal and asset lifecycle. VTS Data, the industry’s only forward-looking market dataset, and VTS Market and Marketplace, the industry’s first integrated online marketing solution, give landlords, brokers, and tenants unparalleled visibility into real-time market information and the direct connectivity to execute deals with greater speed and intelligence at every point in the planning, marketing, leasing, and asset management cycle.

More than 60% of Class A office space in the US and 12B square feet of office, retail, and industrial real estate globally is managed on the VTS platform. VTS’ user base includes over 45,000 CRE professionals including respected industry leaders like Blackstone, Brookfield Properties, LaSalle Investment Management, Hines, Boston Properties, Oxford Properties, JLL, and CBRE. To learn more about VTS, and to see our open roles, visit www.vts.com.

Contacts

Media:
Alison Paoli

Kingston Marketing Group

alison@kingstonmarketing.group

Elise Szwajkowski

Marino PR

eszwajkowski@marinopr.com

Eric Johnson

VTS

eric.johnson@vts.com

80% of Organizations Increased Focus on Identity Security Following Pandemic Shift to Remote Work

With Securing Digital Identities in the Spotlight, Identity Defined Security Alliance Offers CISOs Guidance on Elevating the Role of Identity within Security Strategies

DENVER–(BUSINESS WIRE)–#beidentitysmartThe Identity Defined Security Alliance (IDSA), a nonprofit that provides vendor-neutral resources to help organizations reduce the risk of a breach by combining identity and security strategies, today released a study titled, “2021 Trends in Securing Digital Identities,” based on an online survey of over 500 IT decision makers. The report examines the impact that the pandemic and increase in remote work had on Identity and Access Management (IAM) in the enterprise, as well as the implementation of identity-focused security strategies.

IDSA logo final v

Over the last year, the shift to remote work has led to an increase in the number of identities and an increased focus on identity security, but a decrease in confidence in the ability to secure employee identities. Four out of five participants believe that while identity management used to just be about access, it’s now mostly about security. In accordance, the majority of organizations have made changes to better align security and identity functions, with one of those changes being increasing CISO ownership of IAM.

Despite additional security challenges introduced in 2020 with more identities, exponential remote access, and more personal devices, the number of identity-related breaches remains flat. 79% of organizations experienced an identity-related breach within the past two years, the same as reported in a previous study conducted by the IDSA in April 2020. Increased attention also appears to be correlating with increased investment, as nearly all organizations will be investing in identity-related security outcomes in the next two years.

“The past year forced organizations to recognize the importance of securing digital identities, whether maintaining employee productivity through secure access from anywhere, using any device, or transforming engagement with customers to secure online services,” said Julie Smith, executive director of the IDSA. “If it hasn’t already happened, CISOs should seize this opportunity to elevate the importance of identity, not just in security strategies, but as an opportunity to provide business value through risk reduction, including Zero Trust initiatives, cost containment, increased productivity, and to improve both employee and customer experiences.”

Key Research Findings

Remote work has significantly impacted identity security

  • 83% report that remote work due to COVID-19 increased the number of identities
  • 80% say the shift to remote work increased focus on identity security
  • Confidence in the ability to secure employee identities dropped from 49% to 32% in the past year

Breaches are still prevalent, but investments in targeted prevention are accelerating

  • Identity breaches are not increasing, but they are having an impact on organizations
  • At least 70% report they began implementation or planning of identity-related security outcomes in the past two years
  • 97% will make investments in identity-related security outcomes over the next two years
  • 93% believe they might have prevented or minimized security breaches by using identity-related security outcomes

Security is taking a broader role in identity management, with positive effects

  • 64% report that they have made changes to better align security and identity functions within the last two years
  • 87% report the CISO has a leadership role when it comes to IAM, a dramatic contrast to 53% that said the same about the security team in 2019
  • Organizations where the CISO has ownership of IAM are more likely to say the security team has an excellent understanding of their identity strategy and implement identity-related security outcomes

Identity Defined Security Alliance Resources

An Identity Defined Security Outcome is a desired result that improves an organization’s security posture and reduces the risk of an identity-related breach or failed audit. According to the report, 93% of organizations believe that the IDSA’s Identity Defined Security Outcomes may have prevented or minimized the impact of the breaches they suffered. Included with each Identity Defined Security Outcome are vendor-neutral implementation approaches, which are well-defined patterns that combine identity and security capabilities. To view the full library of outcomes, visit https://securityoutcomes.idsalliance.org/.

To download the full report, visit www.idsalliance.org/2021-trends-in-securing-digital-identities-2/.

Identiverse 2021

Join panelists from Intuit, Robert Half, Dimensional Research, and the IDSA as they discuss the 2021 Identity Security Trends Report on Tuesday, June 22 from 8:30 – 9:20 a.m. MDT. For more information and to register, visit https://identiverse.com/idv2021/session/SES7EJAXRI3427G6L/.

Survey Methodology

Dimensional Research conducted an independent online survey of IT security and identity professionals in the United States. A total of 512 qualified participants completed the survey. All participants were directly responsible for IT security or IAM at a company with more than 1,000 employees. Participants included a mix of roles, company sizes, and vertical industries.

About the Identity Defined Security Alliance

The IDSA is a group of identity and security vendors, solution providers and practitioners that acts as an independent source of thought leadership, expertise and practical guidance on identity centric approaches to security for technology professionals. The IDSA is a nonprofit that facilitates community collaboration to help organizations reduce risk by providing education, best practices, and resources.

Contacts

Julie Smith

303-324-3159

julie@idsalliance.org