October 2020
Armano Real Estate estimates only 10-12% of all New York City workers have returned to the office. This represents a moderate uptick from the 6-8% back in July. New York City’s non-essential workers were first allowed back into the building in late June, after offices were closed in March due to the pandemic. Nationally, an estimated 25% of workers have returned to the office. This represents a much higher percentage than New York City’s.Â
While New York City struggled to contain the virus in early spring, it now has a much lower per capita rate of new Covid-19 infections than cities where a higher percentage of the workforce is back at their desks. However, New York’s reliance on mass transit—and concerns that the new coronavirus could spread through subways, buses or regional trains—has kept many people working from home. Cities with more driving commuters have seen a higher percentage of workers return.
Occupiers have been bringing a tremendous amount of excess space to the market. Sublets now account for over 26% of total available space. Overall availability has increased by approximately 1.5% over the past three months, according to market sources, and total availability is now at levels not seen since the Great Recession of 2008.Â
The months long stretch of near-empty office buildings has had a debilitating effect in Midtown Manhattan and other business districts, leading many small shops and restaurants to shut down permanently.
Armano Real Estate believes occupiers will seek permanent work-from-home solutions in the coming years. We anticipate a 10-15% total reduction in structural demand for office space across the market. This will dampen future rent increases in the recovery period.Â
The recent market weakness presents an excellent opportunity for certain tenants to leverage their estate position for future success. Accordingly, Armano Real Estate is modifying leases for tenants and implementing space planning and design strategies to reflect new workplace and economic realities. We have been achieving occupancy cost savings in the 18% to over 80% range, depending on the case and type of strategy.
Safely re-occupying office space and re-positioning real estate based on future workplace trends and business prospects is of utmost concern to employers. Thus, we are providing financial lease analyses and preliminary space programs for tenants at no-fee. This allows tenants to gain a better understanding of their current situation and to help formulate the best possible corporate real estate strategy and vision in a changing market.Â
Please feel free to contact us regarding your future space plan and vision. We will help you evaluate all options and make the best possible corporate real estate decision. Â
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Please see our recent podcast interview on the state of the NYC real estate market:
https://dontsignthelease.com/2020/09/03/episode-052-new-yorks-armano-real-estate-interview/
Please see the below links for NYS Guidelines:
NYS Guidelines
Reopening New York
Positive COVID-19 Results by Region
Please see the following link regarding HealthCheck360 COVID-19 Workplace Solutions:
https://www.healthcheck360.com/covid19-workplace-solutions
