One executive with a major stake in New York City’s office market believes a post-pandemic recovery is coming — he just isn’t sure when yet, with the Delta variant sowing chaos into the process.
“I think the return to the office is a ‘when’ question, not an ‘if’ question,” Boston Properties CEO Owen Thomas told the New York Times. “Delta is affecting the when.”
Boston Properties has felt the effects of the Delta variant firsthand. The company owns approximately 12 million square feet of space in the city. Its buildings had returned to around 40 percent of their pre-pandemic occupancy by the beginning of the summer, but that figure has since receded to around 30 percent this month, according to the Times.
The larger office market in the city is struggling as companies push back returns to the office due to concerns about the variant. Major office holders such as Facebook, BlackRock and Wells Fargo have now delayed office returns to October and beyond. The office vacancy rate in Manhattan last month was 17.1 percent, matching a record high set in May.
Meanwhile, the city’s economic recovery isn’t keeping up with other markets across the country. New York City sports a 10.5 percent unemployment rate, almost twice the national average. The city has lost around 500,000 jobs since the start of the pandemic that have yet to be replaced, according to the Times.
Stopping the Delta variant in its tracks is seen as one way to boost the city’s recovery. In addition to floating a $100 incentive for those who receive their first dose at city-run vaccination sites, the de Blasio administration has implemented a vaccine mandate across many indoor businesses and locations across the city, though enforcement on the mandate isn’t coming until next month. At least two groups have sued the city over the mandate.
[NYT] — Holden Walter-Warner