Saturday, November 13, 2021

Real Estate Schizophrenia in New York City

Who knows what to make of this. While we read about New York’s sky high residential rents, we also read that commercial real estate is not doing so well. Aside from the obvious fact, visible on the streets, that a large number of storefronts in Manhattan are now empty, there is also this fact, namely that office buildings are barely in use. That’s a lot of real estate and a lot of mortgages.

The New York Post reports:

Not even 30 percent of Manhattan’s 1 million workers are back in their offices — and just 8 percent are at their desks full-time, according to a new survey.

Over half of the employees are still fully remote, according to the poll by the business group The Partnership for New York City that surveyed major employers in late October.

They expect almost half of their workers to be in the office on an average weekday by Jan. 30, but a third of the companies also plan to slash their space requirements over the next five years, the survey found.

The employers most likely to cut office space are in accounting, public relations and tech.

That’ll result in an estimated 13 percent reduction in jobs located in the city, with the greatest in-person losses in the financial services industry.

How does that work? Fewer jobs in the city; higher rents in the city. It feels schizo. Something has to give. 


Webutante said...

Whatever happens or doesn't happen in Manhattan real estate, it's sure to be exacerbated by Chinese mega real estate companies Evergrande and Oceanwide, both on the verge of default with global cascading effects!

Sam L. said...

And then there's the less taxes for those who no longer work in NYC.... OH! The HORROR!! The horror...

Linda Fox said...

Now, a suspicious person might suggest that this is specifically intended to hurt a certain real estate mogul, both to deprive him of money punitively, AND to keep him from using that clout to run for office, again.
Not ME, of course. I COMPLETELY believe the mainstream media that such thinking is paranoid delusions.

mimetic polyalloy said...

Linda, while your suspicion might indeed be well founded, I do believe that certain real estate mogul (assuming we are speaking of the same person :-) has priced that concern into his business model, and has well-diversified his portfolio away from midtown Manhattan. I think he'll do quite well in the end.