The Manhattan offices, in hibernation due to Covid-19. After becoming the epicenter of the pandemic in the United States, New York has emptied its offices. At the end of 2020, the city had an availability of 15.1% after an increase of 300 basis points compared to the previous year, the steepest since 2012. The increase in unemployment has been caused by a drop in hiring, which ended the fifth quarter with more exits than new hires.
Between new hires and renovations, the city recorded the lease of 382,760 square meters in 2020, which represents a decrease of 58% compared to 2019. In total, the net absorption in 2020 was 210,000 square meters, 69% less than in the previous year and the lowest figure recorded. On the contrary, subcontracting increased 77% compared to 2019 with 395,000 square meters rented, according to data from the consulting firm Cbre.
After a year of pandemic, New York has managed to recover 76,000 physical jobs that were destroyed in the first months of Covid-19 in the country, which is less than half, since due to mobility restrictions to stop the advance of the virus, 241,000 New Yorkers have stopped coming to their job. Added to the telecommuting boom is the rise in unemployment, which at the end of November was 12.2%, well above that registered before the pandemic, which was around 3%.
New York has 165,000 professionals working in offices since the pandemic
Low interest rates and the approval of the second US government stimulus package, amounting to $ 900 billion, boost the sector and are expected to boost spending and revitalize activity. However, the consultant indicates the middle of the second semester as the return to normality, counting on the application of vaccines and obtaining group immunity.
Although the new hiring of office space is stopped, the last quarter of the year stood out in renovation operations with 60,108 square meters, the highest figure of the year. The largest deals in the quarter were renovations, including the signing of 25,000 square meters by Justworks and the leasing of a 15,000-square-meter office by New York City Council.
Even with increasing availability, rents have remained stable. At the end of 2020, the average price of downtown Manhattan was $ 680 per square meter per month, which represents an increase of 1% compared to the previous quarter and a 3% drop compared to the same period of the previous year.
Construction of new projects in the center is also limited. The only major project on the horizon is the construction of 260,000 square meters by the company Silverstein Real Estate, but it is not yet under construction.
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