New York City's government is developing a plan to bring back 25% of its workers to offices by the end of the year, according to the Wall Street Journal, which cited a person familiar with the matter as its source.
New York City government workers' return to the office could deliver a significant boost to the metro's office buildings—the city government is the largest employer in the area—which have been languishing nearly empty since the pandemic began.
The source said the plan is still under development and could be changed if there is a large resurgence of the virus.
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Manhattan employers have been reluctant to bring back workers to the office to the chagrin of office building owners.
Just 8% of Manhattan's 1 million office workers had returned to their buildings in mid-August, according to a survey of employers conducted by the Partnership for New York City—a nonprofit organization dedicated to bolstering local commerce and innovation. Employers anticipate that just 54% of their workers will be back in offices by July 2021, it found. And more than a quarter of employers—28%—said they don't yet know their plans for returning to the office.
The local commercial real estate market has suffered as a result. For instance, Manhattan leasing activity totaled just 2.57 million square feet in Q3 2020, with Midtown registering 2.01 million square feet, Downtown 455,000 square feet and Midtown South 104,000 square feet, according to recent figures from CBRE.
One characteristic of this pandemic-driven market has been the reluctance of tenants to make long-term decisions, according to Nicole LaRusso, director of Research and Analysis for CBRE Tri-State.
Building owners have been alternatively pressuring and cajoling local businesses to return to their offices, not only to fill the space but also to support the local retail amenities, which are also suffering from the absence of the city workers.
Earlier this year Bloomberg reported that a loose coalition of New York's top property owners including Related Cos., RXR Realty, Rudin Management and SL Green Realty had been working the phones to this end.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
