NYC offices reach milestone since pandemic shutdown with 40% occupancy

[Kamaji]

NYC offices reach milestone since pandemic shutdown with 40% occupancy

By Mary K. Jacob
June 16, 2022

It took more than two years for companies to begin summoning their employees out of their pajamas and back into the office, and now it looks like landlords have something to celebrate.

Since the March 2020 COVID-19 shutdown, New York City’s recovery reached a milestone for the first time, as office occupancy topped 40% in the past week, according to Kastle Back to Work Barometer data reported by The City.

Specifically, office attendance jumped nearly 5% from the previous week. The numbers come as COVID cases in the city have been falling. The latest data from the city health department shows an 8.06% positivity rate around town in a decreasing trend.

“This is good news for our city’s recovery as the presence of office workers in the central business district is critical for retail, restaurants and other storefront businesses hit hard by the pandemic,” James Whelan, president of the Real Estate Board of New York, told The Post in a statement. “As the public health situation continues to improve, policymakers must continue to focus on smart solutions that will bring new public and private sector investment into our urban centers to make them more resilient, equitable and vibrant.”

In comparison, around this time last year, office occupancy was as low as 10.6% as many locals — specifically those who left the five boroughs to work remotely — remained out of the city. But since then, certain companies have implemented mandatory return-to-office policies. One of them is Citicorp, which upped its required office days from two per week to three beginning in June.

Still, while a big jump from last year, 40% is not 100%, and is still costing the city more than $600 million in annual property tax revenue, a recent report from City Comptroller Brad Lander estimated.

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Source:  https://nypost.com/2022/06/16/nyc-offices-hit-40-occupancy-since-covid-shutdown/

[IsailedawayfromFR]

Only 40%?

Any idea how high it was pre-pandemic?

[Kamaji]

Only 40%?

Any idea how high it was pre-pandemic?

Around 80% or so.

[PeteS in CA]

I'm having trouble understanding this. The computer company for which I work was partially shut down from mid March through the end of April 2020. My role is internal tech support and quality assurance. I was splitting time, in-office for what could only be done there, and at home for what I could do at home. I've been full-time in-office since May 2020, as has pretty much everybody in my building.

I know social media companies (FB, Twitter) and web-based companies like Google were mostly working remote for much longer, and some still are, but I don't understand that, either.

[Kamaji]

I'm having trouble understanding this. The computer company for which I work was partially shut down from mid March through the end of April 2020. My role is internal tech support and quality assurance. I was splitting time, in-office for what could only be done there, and at home for what I could do at home. I've been full-time in-office since May 2020, as has pretty much everybody in my building.

I know social media companies (FB, Twitter) and web-based companies like Google were mostly working remote for much longer, and some still are, but I don't understand that, either.

Most NYC companies have had all or a substantial portion of their staff working remotely for the last two years.  I went back to the office full time back in June of 2020, but other than our office - which was about half back in the office at that time - the building was basically empty until the last few months.

It works because the companies aren't incurring additional rent expense for their employees' own home offices, so they've been able to continue paying their commercial rent at the offices they have and still make a profit.

[IsailedawayfromFR]

Around 80% or so.

I wonder why the value of most REITs don't reflect this disastrous loss of income from leased office spaces?

[Kamaji]

I wonder why the value of most REITs don't reflect this disastrous loss of income from leased office spaces?

Because they haven't lost the income - yet.  The offices are empty, but most companies are still paying the rent on their leases.