What’s Going To Happen To All The Office Space In NYC?

desks, desks everywhere, but who is using them?

There’s a lot of news talking about the death of office space in New York City.

• Loans coming due – $16BB or more – on commercial real estate in 2023
• Super low office attendance, even with mandates
• Tech companies walking away from leases, subletting, and not signing new leases
• Working from home still the rage- and the challenges drawing people back in

But It’s Way Too Soon To Tell

• The visionaries of companies, their CEOs, were very early to foresee that there’s going to be a return to the office, in some capacity.  They were just too early.  No one else could see what they could see.  Now it’s getting real.
• But Employees miss office life.  Now they’re willing to admit it and talk about it.
• In New York, old rental buildings can no longer convert to condo, due to rules changed less than 5 years ago.  Buildings of 5 or fewer units can convert to coop or condo as of 12/22, with fewer hurdles,  but that will hardly make a dent.
• I’m hearing about developers raising money to convert less-efficient office space- known as “B and C” office space- into residential condos, in midtown and elsewhere.  The Mayor seems to want to cooperate, too.
• Other CEO’s are discussing a more concerted push to get their employees back, to three- and four days a week in the office.  And it seems to be working already.

When It Comes To Office Space In New York City, It Feels Like The Second Inning

It is way, way too early to tell what’s office space will look like in five years.  Odds are that it will take up a smaller footprint, will look quite differently on the inside, and yet will still be a main driver of Midtown Manhattan’s energy.  What is now a barbell- workers in their 20’s and workers in their 60’s- who prefer to go back to the office now- that will continue to morph and grow, too.

get some snacks. this is going to be an exciting game to watch!

So don’t count office space out just yet.  Go buy a hot dog, some crackerjack, and settle in for a fun game.  -S