“If offices don’t come back, we’re done”: Phase 2 off to slow start

Office landlords report just 5 percent of normal occupancy

New York /
Jun.June 23, 2020 11:12 AM
Phase 2 of New York City’s reopening is off to a slow start, as office landlords see occupancies of just 5 percent their normal levels. (Getty)

Phase 2 of New York City’s reopening is off to a slow start, as office landlords see occupancies of just 5 percent their normal levels. (Getty)

Phase two of New York City’s reopening started Monday, with office workers allowed to return to their buildings, brokers allowed to resume in-person showings, and a limited reopening of retail and outdoor dining. But the city is still a far cry from its pre-lockdown self.

Rudin Management Company reported that occupancy across its 14-building commercial portfolio was at just 5.2 percent of the normal level, based on initial data collected on Monday. Silverstein Properties is expecting similar figures.

“A lot of it had to do with building tenants not feeling comfortable with public transportation,” Silverstein COO Dino Fusco told Politico, pointing to the experience of other global cities that reopened before New York.

Real estate brokerages are also seeing limited enthusiasm for a quick return to the office.

“I saw today firsthand that a huge majority of our agents aren’t willing to come into the office and I think that’s going to take a period of adjustment,” Douglas Elliman New York City CEO Steven James said.

The slow return of office workers will have serious implications for the broader economy and small business that depend on their patronage. “We rely on office people, and if offices don’t come back, we’re done,” said the manager of Friendly Pizza.

Although 3,192 restaurants have received approval to set up tables for outdoor dining, this represents barely one-ninth of the restaurants that were open before the pandemic.

The reopening of the city has proven to be a complex process, with many interconnected factors to consider. “Most working parents can’t return to the office until kids can return safely to school, daycare, or summer camps,” former Friends of the BQX executive director Ya-Ting Liu tweeted Tuesday. “This will be a long summer followed by an unpredictable fall.” [Politico] — Kevin Sun


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