Recent trends in New York City’s office usage and return-to-work mandates indicate a significant shift towards pre-pandemic norms. As of October 2024, office visitation rates reached 86.2% of 2019 levels, suggesting a decline in the work-from-home trend that surged during the pandemic.
This resurgence is particularly evident in high-demand office locations such as Sixth and Park Avenues, Hudson Yards, and the World Trade Center. Major employers, including JP Morgan, Meta, Alphabet and Goldman Sachs have implemented stricter on-site work policies, contributing to increased office attendance.
However, a notable divergence has emerged between high-end (Trophy and Class A) and lower-end (Class B and C) office spaces. Top-tier buildings have experienced low vacancy rates and high demand. Lower end properties, however, continue to experience high vacancy rates and lower demand.
Armano Real Estate expects demand for office space to increase in 2025 as companies and employees align their in-office work expectations. We also expect supply of office space to decrease, as there are very few new office developments coming online, while older office buildings are coming off the market due to conversion and obsolescence.
Thus, we are expecting office rent increases in 2025. We expect continued strength in the high-end, leading to large rent increases in this asset class. We expect moderate rent increases in the low-end, as overall strength lifts the whole market.
Armano Real Estate encourages tenants to make their plans as the market tightens. There are huge benefits to early planning which we would be happy to discuss.
Please see our video link below and feel free to reach out to us for a complimentary lease review or space planning consultation.
Additional Resources
The NYC office market was full of surprises — both good and bad — in 2024
NYC office market roars back to life, sending tenants scrambling
