Although NYC office space rentals are up in some respects, the numbers can be deceiving. When examining the status of commercial office space in New York City, it's important to distinguish between square footage leased and new leases signed. As an article by BISNOW reports, the amount of square footage leased in the first quarter of 2021 rose by 90% compared to the previous quarter; however, unleased office space also rose by 19%
NYC Office Space Leasing Has Not Returned to Pre-Pandemic Norms
Several factors have contributed to a quasi-return to “normal” in recent months. Effective Covid-19 therapeutics and a general acceptance of managing the pandemic for the long term have spurred many business owners to ask employees to return to the office. As you might expect, leasing volume has increased, at least when compared to the first months of 2020. Still, the numbers have not yet entirely recovered.
What we are seeing is a different recovery rate for different types of office space property. For example, Class B and C office spaces have lagged in leasing compared to Class A office space. Titans of industry, like Hermès, have made big moves in NYC and scooped up tens of thousands of office space square footage in the last year. Meanwhile, the Class B and C rental properties remain disproportionately unleased.
The lingering question is whether more traditional office space leasing will eventually catch up to the luxury office space leasing rates. It's difficult to say whether this trend is a sign of increasing wealth disparity or a symptom of the ongoing pandemic. The bottom line is: even though NYC office space square footage is increasingly leased, the Class B and C spaces continue to experience high vacancy and decreasing rents.
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If you have concerns about your NYC real estate interests, the time to talk to a real estate attorney in New York is now. Our experienced team can help you through default or the sale of your property. To speak to the dedicated legal professionals at the office of Melvin Monachan, call (347) 389-1682 or contact us online today.