As the pandemic continues, the majority of companies still aren't bringing workers back to the office. Manhattan's sea of office buildings are still mostly empty, which has some wondering if the economic engine of the city is forever broken.
Even as New York City springs back to life and has had a bit of a buzz return, America's largest business districts — midtown and Lower Manhattan — are stuck at a red light.
"Most of these office buildings in this neighborhood you see are 85 percent vacant," said Corey Abdo, who has been working in commercial real estate for 38 years.
He said he's seen the dire headlines throughout the pandemic, predicting that "remote work is here to stay," or that "Manhattan may never be the same." But Abdo doesn't entirely buy those oft-repeated lines.
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"Manhattan will never be the same as it was pre-pandemic, but I believe Manhattan — like it's done so many times in the past — will re-invent itself," Abdo said.
A survey from the Partnership for New York City showed that as of March, only 10 percent of Manhattan office workers had returned. Less than half are expected back in the office by September, with slightly more than half saying they'll permanently be working remotely at least some of the time.
But in just the past few weeks, there are new signs of hope.
"Coming back to the office is key to revitalization of New York City," said Jeff Blau, the CEO of Related Companies. From his office overlooking the real estate firm's mega-development at Hudson Yards, Blau said there are recent signs that make him optimistic about workers returning to the office.
"That's Google's new headquarters … so Google's moving more people into New York," he said, pointing out his office window. "I think between now and September, you're going to see that phase in to full return."
And he doesn't mean a modified full return — he means full levels like they were pre-pandemic. Blau points to plummeting COVID rates as vaccinations increase. In just the last week, influential investments banks and tech companies have also signaled that they plan to summon workers back to the office.
"Then all the major law firms that support those businesses and the firms that support the law firms. It'll be a rippling effect," said Abdo, who shares Blau's confidence.
While rents are down and new leases (especially in older buildings) still aren't happening, Abdo and Blau both point to a dramatic increase in office space showings the last month as reasons for their optimism. They also look at a growing demand for luxury buildings, like the just completed One Vanderbilt, which is now 80 percent leased.
"The companies making those leasing decisions believe everyone going to come back," Blau said.
However, plenty of companies have already given up office space in Manhattan. Staffing company Aquent is bailing on their office in Flatiron.
"We've been in New York for 30 years, so it's a big transition for us," said Erin Bloom, who works at the company, in a Zoom interview. "One thing is, we're saving a lot on overhead not paying for real estate, able to invest in people, and it gives people flexibility."
While Blau doesn't agree with getting rid of offices altogether — "innovation, culture, training, that doesn't happen on Zoom," he said — even the biggest proponents of office culture admit that most companies will offer flexibility and some sort of work from home policy. That's why Abdo predicts that some of these empty office buildings will be forced to convert to housing of some kind.
But another glimmer of hope for the epicenter of the tri-state's economy comes from commuters. While ridership on Metro-North is still down more than 70 percent, we found evidence people expect to return.
In the Westchester County town of Rye, few have given up their $1,000-a-year parking spaces at the train station. In fact, there’s 350 people on the waiting list. In Westport, Connecticut, the list is 200 people deep. A bit further out, in Fairfield, there’s no longer a waiting list — but officials expect there will be in 2022.
To Blau, that's a very encouraging sign.
"Because if they give it up, they'll never get it back. Which means, that they believe they will return," he said. "So they're preparing for the return."
