Americas

Office Vacancies Soar in New York, a Dire Sign for the City’s Recovery

Nearly 19 percent of all office space in Manhattan has no tenants — the highest on record — as companies shed leases and embrace remote work.


By Matthew Haag

Even as New York City reopens and pursues a long road to economic recovery, the pandemic’s lasting legacy of a changing workplace is emerging as a major obstacle to the revival of the vital commercial districts that help fuel the city’s economy.

While some companies are preparing to call back workers to their offices, the amount of office space available for lease in Manhattan has soared to the highest rate ever, according to reports released on Thursday, underscoring how the sudden shift to remote work during the coronavirus pandemic is upending the city’s commercial real estate industry.

Across Manhattan, home to the two largest business districts in the country, 18.7 percent of all office space is available for lease, a jump from more than 15 percent at the end of 2020 and more than double the rate from before the pandemic, according to Newmark, a real estate services company.

Many New York employers are offering greater flexibility to their work force, allowing at least some remote work even as the pandemic recedes and recalculating their space needs. As a result, companies continue to end their leases or seek tenants to take over their existing leases at a steady pace.

Some neighborhoods are faring worse, such as Downtown Manhattan, where 21 percent of offices have no tenants, Newmark said.

Kathryn Wylde, the president of the Partnership for New York City, an influential business organization, said that New York City was facing its biggest crisis since the 1970s, when half of the city’s 125 Fortune 500 companies moved out.

“This is as close as we’ve come to that type of scenario where there’s an exodus from the city, and the recovery took 30 years,” Ms. Wylde said. “The city has to attract people for reasons other than going to the office.”

Source: Read Full Article