mat200
IPCT Contributor
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- Jan 17, 2017
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Pay attention now, the new narrative is
The Pandemic and Work From Home is destroying NYC .. instead of poor Government policy / regulations / taxes and a Real Estate ponzi game ..
NYC's empty offices are a self inflicted wound; not just COVID related ( Louis Rossmann challenges the Bloomberg WFH Covid Narrative )
Louis Rossmann's review:
Bloomberg Narrative ..
New York City’s Empty Offices Reveal a Global Property Dilemma
The rise of remote work will hurt older buildings, leaving landlords in the lurch
By Natalie Wong, John Gittelsohn and Noah Buhayar
Work Shift + WealthGraphics by Jeremy C.F. Lin, Jenny Zhang and Paul MurraySeptember 25, 2022
In the heart of midtown Manhattan lies a multibillion-dollar problem for building owners, the city and thousands of workers.
Blocks of decades-old office towers sit partially empty, in an awkward position: too outdated to attract tenants seeking the latest amenities, too new to be demolished or converted for another purpose.
It’s a situation playing out around the globe as employers adapt to flexible work after the Covid-19 pandemic and rethink how much space they need. Even as people are increasingly called back to offices for at least some of the week, vacancy rates have soared in cities from Hong Kong to London and Toronto.
Office Vacancies in Major Cities Jumped During the Pandemic
“There’s no part of the world that is untouched by the growth of hybrid working,” said Richard Barkham, global chief economist for commercial real estate firm CBRE Group Inc.
In some cases, companies are simply cutting back on space to reduce their real estate costs. Others are relocating to shiny new towers with top-of-the-line amenities to attract talent and employees who may be reluctant to leave the comforts of working from home. Left behind are older buildings outside of prime locations.
The US is likely to have a slower office-market recovery than Asia and Europe because it began the pandemic with a higher vacancy rate, and long-term demand is expected to drop around 10% or more, Barkham said. New York, America’s biggest office real estate market, is at the center of the issue.
A study this year by professors at Columbia University and New York University estimated that lower tenant demand because of remote work may cut 28%, or $456 billion, off the value of offices across the US. About 10% of that would be in New York City alone.
The implications of obsolete buildings stretch across the local economy. Empty offices have led to a cascade of shuttered restaurants and other street-level businesses that depended on daytime worker traffic. And falling building values mean less property-tax revenue for city coffers.
...
link to the Bloomberg piece:
www.bloomberg.com
The Pandemic and Work From Home is destroying NYC .. instead of poor Government policy / regulations / taxes and a Real Estate ponzi game ..
NYC's empty offices are a self inflicted wound; not just COVID related ( Louis Rossmann challenges the Bloomberg WFH Covid Narrative )
Louis Rossmann's review:
Bloomberg Narrative ..
New York City’s Empty Offices Reveal a Global Property Dilemma
The rise of remote work will hurt older buildings, leaving landlords in the lurch
By Natalie Wong, John Gittelsohn and Noah Buhayar
Work Shift + WealthGraphics by Jeremy C.F. Lin, Jenny Zhang and Paul MurraySeptember 25, 2022
In the heart of midtown Manhattan lies a multibillion-dollar problem for building owners, the city and thousands of workers.
Blocks of decades-old office towers sit partially empty, in an awkward position: too outdated to attract tenants seeking the latest amenities, too new to be demolished or converted for another purpose.
It’s a situation playing out around the globe as employers adapt to flexible work after the Covid-19 pandemic and rethink how much space they need. Even as people are increasingly called back to offices for at least some of the week, vacancy rates have soared in cities from Hong Kong to London and Toronto.
Office Vacancies in Major Cities Jumped During the Pandemic
“There’s no part of the world that is untouched by the growth of hybrid working,” said Richard Barkham, global chief economist for commercial real estate firm CBRE Group Inc.
In some cases, companies are simply cutting back on space to reduce their real estate costs. Others are relocating to shiny new towers with top-of-the-line amenities to attract talent and employees who may be reluctant to leave the comforts of working from home. Left behind are older buildings outside of prime locations.
The US is likely to have a slower office-market recovery than Asia and Europe because it began the pandemic with a higher vacancy rate, and long-term demand is expected to drop around 10% or more, Barkham said. New York, America’s biggest office real estate market, is at the center of the issue.
A study this year by professors at Columbia University and New York University estimated that lower tenant demand because of remote work may cut 28%, or $456 billion, off the value of offices across the US. About 10% of that would be in New York City alone.
The implications of obsolete buildings stretch across the local economy. Empty offices have led to a cascade of shuttered restaurants and other street-level businesses that depended on daytime worker traffic. And falling building values mean less property-tax revenue for city coffers.
...
link to the Bloomberg piece:
New York’s Empty-Office Problem Is Coming to Big Cities Everywhere
Remote work could swipe $456 billion in value from US offices
www.bloomberg.com
