The pandemic is pummeling New York City’s commercial real estate industry, one of its main economic engines, threatening the future of the nation’s largest business districts as well as the city’s finances.
The damage caused by the emptying of office towers and the permanent closure of many stores is far more significant than many experts had predicted early in the crisis.
The powerful real estate industry is so concerned that the shifts in workplace culture caused by the outbreak will become long-lasting that it is promoting a striking proposal: to turn more than one million square feet of Manhattan office space into housing.
Nearly 14 percent of office space in Midtown Manhattan is vacant, the highest rate since 2009. On Madison Avenue in Midtown, one of the most affluent retail stretches in the country, more than a third of all storefronts are empty, double the rate from five years ago.
The collapse of commercial real estate is another major burden for New York, since the industry provides a significant portion of the city’s tax revenues.
Filings to erect new buildings in the city, a key indicator of industry confidence, have dropped 22 percent this year to 1,187, the lowest number since 2010.
As of late October, only 10 percent of Manhattan’s one million office workers were reporting to the office, according to a survey by the Partnership for New York City, an influential business group.
And this already bleak picture could even get worse, real estate experts and industry executives said.
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