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Message
New York commercial real estate office space may contract by 1 million sq ft.
Posted on 12/18/20 at 3:09 pm
Posted on 12/18/20 at 3:09 pm
NYT
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.
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.
“It would probably be fair to say we haven’t hit bottom yet,” said James Whelan, president of the Real Estate Board of New York.
Property taxes represent the largest source of city revenue, and commercial property accounts for the largest share of that overall levy, 41 percent, according to Thomas P. DiNapoli, the state comptroller.
Commercial property sales have plummeted by nearly 50 percent through October, according to Rahul Jain, a deputy state comptroller.
Across Manhattan’s retail corridors, asking commercial rents have dropped nearly 13 percent from last year , according to CBRE, a commercial real estate firm.
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.
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.
“It would probably be fair to say we haven’t hit bottom yet,” said James Whelan, president of the Real Estate Board of New York.
Property taxes represent the largest source of city revenue, and commercial property accounts for the largest share of that overall levy, 41 percent, according to Thomas P. DiNapoli, the state comptroller.
Commercial property sales have plummeted by nearly 50 percent through October, according to Rahul Jain, a deputy state comptroller.
Across Manhattan’s retail corridors, asking commercial rents have dropped nearly 13 percent from last year , according to CBRE, a commercial real estate firm.
Posted on 12/18/20 at 3:10 pm to MrLSU
That’s what those liberals get.
Posted on 12/18/20 at 3:12 pm to MrLSU
Just what I want to do, move to a town with no shops and no restaurants
Posted on 12/18/20 at 3:12 pm to PrimetimeDaBoss
quote:
That’s what those liberals get.
Anything for socialism, eh Comrade?
Posted on 12/18/20 at 3:13 pm to MrLSU
Even companies who are still in business are going to scale back to some degree. I've talked to several business owners who have already decided not to renew their office lease and have everyone be remote and/or scale to a smaller space. Rent is a huge overhead cost, so it makes sense.
Posted on 12/18/20 at 3:14 pm to MrLSU
Good job De Balsio you pandering POS.
Posted on 12/18/20 at 3:19 pm to MrLSU
I'm still seeing tons of bids coming out for interior build-outs here in Nashville. I figured companies would've seen how much they could lower their overhead by having people work remotely, or at least part time in the office, but covid hasn't seemed to slow down new office construction here - yet. I still don't see how it will continue to increase, but whatever, just gives me more time to make hay.
Posted on 12/18/20 at 3:20 pm to MrLSU
They did it to themselves. No sympathy.
Posted on 12/18/20 at 3:21 pm to BottomlandBrew
I’ve read so many conflicting stories about office space and work from home.
One survey finds that 80% of people cannot wait to get back to the office. And that work from home is a mere fad.
The other survey finds that 80% of people love working from home and are not renewing their office space lease.
One survey finds that 80% of people cannot wait to get back to the office. And that work from home is a mere fad.
The other survey finds that 80% of people love working from home and are not renewing their office space lease.
Posted on 12/18/20 at 3:23 pm to RogerTheShrubber
Why can’t people blame Republican and Democrat leaders? Why is it always Democrats associated with lockdowns when the virus and original March lockdowns were both Republican and Democrat leaders at state and local level. Is it always going to be pick a side and bash the other?
Posted on 12/18/20 at 3:28 pm to MrLSU
Here’s an idea. Convert it all to public housing for all the “homeless” living in all our cities. Give them a bus ticket to NYC. All welfare dollars would only be accessible in NYC.
Posted on 12/18/20 at 3:29 pm to Paul Allen
quote:
Why can’t people blame Republican and Democrat leaders? Why is it always Democrats associated with lockdowns when the virus and original March lockdowns were both Republican and Democrat leaders at state and local level. Is it always going to be pick a side and bash the other?
Are you being serious? Trends are definitely showing that Democrats are way more likely to be shutting down longer and harder than Republicans. Shut downs in Republican areas are defined by mask orders and social distancing. Shut downs in Democrat areas means shuttering stores and stay at home orders.
Examples:
New York vs Florida
California vs Texas
Illinois vs Ohio
Louisiana vs Mississippi
Posted on 12/18/20 at 3:29 pm to MrLSU
How bad do you have to frick things up to take NYC from a shortage of office space post-9/11 to having an unprecedented glut of it despite the towers never being rebuilt?
Posted on 12/18/20 at 3:31 pm to Boss13
Wasn’t that long ago where people on this site were equally bashing Republican and Democrat leaders. Since the election it’s back to let’s pick a side and criticize the other.
Posted on 12/18/20 at 3:32 pm to Paul Allen
quote:
I’ve read so many conflicting stories about office space and work from home.
Ideally, I'd prefer a hybrid setup where I go to the office 2-3 days per week and wfh the other days.
Posted on 12/18/20 at 3:34 pm to MrLSU
Every private industry quickly realized they could cut out a large expense, and moved to do it.
On the other hand... state governments are leasing more space to house employees.
On the other hand... state governments are leasing more space to house employees.
Posted on 12/18/20 at 3:37 pm to BlackAdam
quote:
Every private industry quickly realized they could cut out a large expense, and moved to do it.
I guess it depends on how many of these will be permanent. Even if it's only 15% it will still be a hit to the commercial real estate market.
This post was edited on 12/18/20 at 3:38 pm
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