“The subway was packed this morning, I stand in line again at lunchtime”: for Robert Byrnes, these little signs bear witness to the gradual reopening of offices in New York. But the return of employees to the city towers is much slower than expected.
President of an association of companies east of the legendary Grand Central station, Mr. Byrnes estimates that only a third of employees are back at their desks.
Stores that depend on their passage to sell food “are still suffering financially,” he said. “It’s slowly improving.”
The Partnership for New York City organization has surveyed the city’s large employers several times: in May, they thought 62% of employees would be back in the office at the end of September, in August it was 41%.
In fact, offices are currently 32% occupied every day, according to the Kastle company, which specializes in building security.
New York lags behind the average of the ten largest US cities (37%).
As a result, nearly 30% of stores in the neighborhood around Grand Central were vacant according to a New York Real Estate Council report in early October, including on street corners and sometimes on entire blocks of buildings.
Iconic establishments, such as the Marriott hotel on Lexington Avenue, which opened in 1924, have closed for good.
– Conversion into accommodation –
Some New York neighborhoods fare better than others because they are less office oriented.
In Times Square for example, with its countless neon signs and Broadway theaters, tourists are coming back.
“In May, there were 145,000 people per day on average, in October, 225,000,” said Tom Harris, president of Times Square Alliance.
On October 9, the occupancy rate of buildings in the neighborhood was 82.5%, he told AFP.
“With twelve new shows on Broadway in the next two months, the return of international visitors in November,” with the lifting of restrictions on vaccinated tourists, “and the gradual return of office workers in 2022, we are very optimistic about the future. takeover of Times Square “.
Still, 32% of shops in the neighborhood are still closed.
Real estate is picking up, with new office rentals picking up in the third quarter in Manhattan to a level not seen since the start of the pandemic, according to Cushman & Wakefield.
The vacant office rate also rose to a record, at 19% against 9.6% on average, but this is in part because of new large premises offered on the market.
The rents charged for new rentals have fallen a little, by 5% compared to the same period in 2020.
For Robert Byrnes, real estate in New York “will never return completely to the situation before the pandemic”, some companies having chosen to eliminate their offices. “It’s a minority but it’s a reality.”
Sam Stovall, financial markets specialist for CFRA, works permanently from his house in Pennsylvania instead of going every day to meet forty colleagues in the One New York Plaza tower in southern Manhattan.
His company has chosen to keep only its headquarters in Maryland and an office in Kuala Lumpur, Malaysia.
“The management considered that we would be as much or more productive if we eliminated the time spent every day in transport,” he said, stressing that some of his colleagues took an hour and a half to come. “And it saves them the cost of rent.”
He reunites with his colleagues at Zoom meetings but misses lunch and drinks at the end of the day with his peers.
The question now is how to compensate for these companies which will not return, notes Robert Byrnes, by evoking for example conversions into housing or businesses less dependent on passages in the street.
Source: AFP
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