The Same, Yet Different
Seems real this time.
Over the past three years, there has been a familiar buzz from employers around Labor Day:
"This is when our employees will begin coming back to the office."
While the effects of those calls were noticeably muted in each of the previous two years, 2022 feels different.
According to the Partnership for New York City's recent survey, 49% of Manhattan office workers are now at their workplace on an average weekday (up from 38% in April of this year), and the share of fully-remote employees dropped to 16% (from a high of 28% in April as well).
With most of my working days spent running to, seeing, or touring office space (thank you Cole Haan), I can’t help but notice the palpable energy haloing through Midtown, with lines out-the-door for popular lunch spots, large after-work crowds at the bars, crowded sidewalks, and of course, suffocating vehicular traffic (even before the gridlock caused by this weeks GA meetings at the UN).
By the same token, the recovery of Midtown has not been evenly distributed to all Avenues and Streets. In some pockets of Midtown (ie. Garment District and Port Authority), Landlords are still struggling to lease deep reservoirs of vacant space, while those areas continue to see fewer workers returning and persistent quality of life issues on the streetscape.
On the transaction front, we continue to see tremendous velocity in the < 6,000 SF market for short-term and move-in-ready space, with pricing for these spaces continuing to increase and overall transaction times speeding up - trends that have been particularly fortuitous for businesses looking to dispose of and sublease their space in short order.
Looking ahead to Q4, the big focus will likely be on the depth, immediacy, and duration of an impending recession. The impact this could have on jobs, layoffs, and the overall demand for office space will be closely watched as employers tighten the bolts on a return to the office.
Until next month,
Ben
Ben Blumenthal
Principal Broker
Noah & Co.
For the rest of our August/September 2022 Newsletter, click here.
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