As vaccine rollouts find success across the country, NYC citizens are ready to get back to business as usual after more than a year of social distancing and COVID-19 shutdowns—mostly. While New Yorkers laud the reopening of restaurants and cheer reunions with family and friends, they are less motivated to go back to the office. The state plans to fully reopen in July, but corporate real estate brokers are sounding the alarm on the extreme challenges they're facing in filling vacant NYC office space.
Not only has the workforce discovered the many perks of working from home, but C.F.O.s have now been enlightened to the truth of an improved bottom line when they take office space rent out of the equation. While some executives push for full office reopenings, lamenting work from home culture, others have embraced it. Most agree that the workplace will never look exactly the way it did pre-pandemic.
All of this change necessitates a looming question—what will happen to NY corporate real estate? According to a NYT article, “In only a year, the market value of office towers in Manhattan, home to the country's two largest central business districts, has plummeted 25 percent.” In fact, there is more office space available for rent in Manhattan right now than there has been in the last three decades. To entice big business tenants, corporate landlords are reducing rent and offering other concessions.
When Will the NYC Commercial Real Estate Market Recover?
There is hope on the horizon, and many Big Tech companies see an opportunity to take advantage of favorable leasing terms in NYC's business districts. Others see value in converting the vacant office buildings into residential units. The question is, how far away is that horizon? It's difficult to know when NYC will fully rebound from the COVID-19 shutdowns. Some experts predict a quick return to normal once restrictions are fully lifted, while others anticipate a 4 to 5-year recovery. While some property owners have considerable financial flexibility, a long real estate recovery worries many others.
If you're concerned about the recovery timeline and whether or not you'll be able to endure your current loan obligations, reach out to our competent legal team at 347-389-1682, or contact us online today.