Never mind the predictions of foreclosures and ruin: The New York Association of Realtors’ latest office building “visit” analysis paints a less bleak picture of the endlessly discussed and debated commercial real estate market.
Attendance at Manhattan offices continues to recover slowly as more companies have encouraged employees to return to their desks over the past few months.
The office market crisis is too often blamed on working from home, when in fact landlords are primarily suffering from the overwhelming pressure of high interest rates and reduced demand for space as companies downsize and consolidate.
REBNY shows its current office attendance as a percentage compared to pre-pandemic 2019, when (contrary to widespread belief) office occupancy was well below 100% on any given day, with some employees already working from home and others away on business trips or vacations.
Manhattan office traffic reached 74% of 2019 levels in March and 75% in April, according to REBNY, both rates above 70% in March 2023.
The rates are based on Placer.ai’s location data for 350 major Manhattan buildings, compiled from mobile phone data.
A report by Keith DeCoster, director of market data and policy at REBNY, found that:
* Visitation rates for the highest end Class A+ properties were 82% (compared to 2019) in March and 89% in April. However, Class B and C buildings also saw a healthy visitation rate of 72%.
High occupancy rates in “trophy” buildings are not surprising: Places like One Vanderbilt, One Bryant Park, One World Trade Center and several towers at Hudson Yards have reported daily occupancy rates of up to 95%.
“Office activity is gradually approaching pre-pandemic levels, led by the highest quality properties,” DeCoster said.
* Average visitation was highest in Midtown, as expected, at 76% and 78% in March and April, respectively. Downtown, visitation improved from 54% in February to 66% in March and April.
Zach Steinberg, REBNY’s senior vice president of policy, said the traffic data also includes visits to retail stores in office buildings, a fact that had not previously been fully disclosed.
“We’re considering the entire ecosystem of the building,” Steinberg explained.
But wouldn’t that skew the office data? “No, the 2019 data includes visits to shops and restaurants in office buildings, so it’s still an apples-to-apples comparison.”
A recent study by the New York City Partnership found similar results.
The group, which surveyed 130 large employers, found that between April 19 and May 6, office attendance was at 72% of pre-pandemic levels.
So much for the “Barometer” which claims only half as many people are working in the office compared to 2019.
