NYC's Office Market May Fully Recover By July
By March, office visits are expected to rise putting the city on track for a complete recovery by summer.
If current trends hold, the office market in New York City may be on track for a full recovery by July 2022, according to Placer.ai.
The firm’s most recent New York City office analysis predicts office visits will continue rising in December, but cautions that “the recovery may stall a bit in January and February 2022 as the cold weather sets in and people accustomed to working from home stay in their comfort zone.”
But by March, Placer.ai’s Shira Petrack says, office visits are expected to rise yet again, putting the city on track for a complete recovery by summer.
After a brief decline in September, October office visits were down by 47.7% over 2019 numbers, and the November visit gap declined to 34.3%—“a major leap given that the Yo2Y visit gap had been hovering at around 50% for the previous four months,” according to Petrack.
“The fact that office foot traffic bounced back so quickly after this fourth COVID wave indicates that Americans are ready to return to their workplace,” she notes. “While office attendance may have dropped as the risk of infection rose, it seems that the novelty of 100% work-from-home has worn off, and people didn’t waste time going back to the office—at least partially—once the risk subsided.”
Office visits have gone up almost every month since March, with the exceptions of August and September, when the Delta variant threatened return-to-work plans. with the only major exceptions in August and September—at the height of the fourth COVID wave. Following those blips, visits again increased in both October and November, with 26.2% and 12.5% month-over-month growth, respectively.
“The increase in office foot traffic reveals the transition underway from a work-from-home model towards a more hybrid model,” Petrack writes. “While many workers may not be returning to the office every day, the office foot traffic increase is significant enough to bode well for the future of office buildings.”
New York’s office leasing market has gained steam in recent months, with seven major lease transactions totaling 240,000 square feet in Midtown Manhattan in November alone. Of those deals, office owner LeFrak completed five lease transactions totaling 100,000 square feet at 40 West 57th Street in New York City’s Plaza District. In the largest transaction, Givaudan signed a 50,000-square-foot renewal for the 10th and 11th floors of the building.