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

by Msnbctv news staff

Just as the broader economic recovery has been uneven with some industries faring better than others, so too will the office market rebound in different ways in Manhattan, Mr. Wallach said. Neighborhoods close to major transportation hubs, like Pennsylvania Station and Grand Central Terminal, could recover faster than other parts of Manhattan.

“The long-term, overall market will recover,” Mr. Wallach said, “but the when, where and how — that will vary where you are standing.”

One real estate firm, Savills, said the Manhattan office market would not likely rebound to prepandemic levels until “late 2022 or beyond.”

At the end of May, just 12 percent of Manhattan’s office workers had returned to their desks, according to a survey of companies by the Partnership for New York City. More than 60 percent of workers are estimated to return in September, the group said, but many companies will allow their employees to work remotely at least several days a week.

Throughout the pandemic, just one industry — the technology sector — has signed significant leases in New York. But those companies, such as Facebook and Google, are also perhaps best equipped to shift seamlessly to remote work. Facebook’s chief executive, Mark Zuckerberg, said in June he planned to work outside the office for half of next year.

Ms. Wylde said that the growth of the tech sector increasingly appeared to be a short-lived success, as employees in those companies demand that they be allowed to work remotely or on a hybrid schedule on a permanent basis. They are telling their employers that they do not want to pay expensive apartment leases in New York to work in the office only a few days a week, she said.

“The other cities have become more competitive as a result of the pandemic and the whole remote-work phenomenon,” she said. “It’s going to require a real shift in public policy toward focusing on quality of life, a positive business climate and affordability.”

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