About 78 percent of the 160 major employers surveyed said they’ve adopted hybrid distant and in-person arrangements, up from 6 percent before the pandemic. Most employees plan to come back into the office just a number of days per week, the group said.
The seismic shift in office constructing usage has been one of the difficult situations in a long time for Recent York real estate, a bedrock industry for town, and has upended the vast stock of offices in Manhattan, home to the 2 largest business districts within the country, the Financial District and Midtown.
About 19 percent of office space in Manhattan is vacant, the equivalent of 30 Empire State Buildings. That rate is up from about 12 percent before the pandemic, based on Newmark, an actual estate firm. Office buildings have been more stable in Brooklyn, where the emptiness rate can be about 19 percent but has not fluctuated much since before the pandemic, Newmark said.
Daniel Ismail, the lead office analyst at Green Street, a business real estate research firm, predicted that the office market in Manhattan would worsen in the approaching years as corporations adjusted their work arrangements and as leases that were signed years ago began to run out. Normally, corporations which have kept offices have downsized, realizing they don’t need as much space, while others have relocated to newer or renovated buildings with higher amenities in transit-rich areas, he said.
Even before the pandemic, it was not unusual for corporations to maneuver offices throughout town or to open separate locations outside of Manhattan. Town offers a tax incentive for businesses that relocate to an outer borough, with as much as $3,000 in annual business-income tax credits per worker.
Nearly 200 corporations received it in 2018, for a complete of $27 million in tax credits, probably the most recent data available, based on the city’s Department of Finance. But some office developers are betting on neighborhoods outside Manhattan becoming attractive in their very own right, luring corporations that specifically wish to avoid the hustle-and-bustle of Midtown.
Greater than 1.5 million square feet of office space is under construction in Brooklyn, including a 24-story business constructing in Downtown Brooklyn.