Only 28% of Manhattan office workers are back at their desks and fewer than half will return by January, in accordance with a brand new survey.
Employers count on that 49% of office workers will return on a mean weekday by January, in accordance with a survey of 188 huge employers in Manhattan by the Partnership for New York City. That’s up from the present stage of 28%, but the survey means that distant work will endure lengthy after January and scale back demand for office house in New York.
According to the survey, greater than a 3rd of employers count on their office house wants in Manhattan will decline over the subsequent 5 years, and 13% count on a discount in their New York City workforce.
“Post-pandemic, remote work is here to stay,” mentioned Kathryn Wylde, president and CEO of the Partnership for New York City, the metropolis’s main enterprise group. “There is going to be a permanent relook at keeping offices and jobs in New York City.”
Office emptiness charges in New York City are now at a 30-year excessive of 18.6%. The worth of the metropolis’s business actual property has fallen by $28.6 billion, or 16.6%, lowering property tax income by as much as $1.7 billion this fiscal 12 months, in accordance with a latest report from New York State Comptroller Thomas DiNapoli. Property taxes are the largest supply of income for New York City, and business property is the largest supply of property taxes, so continued weak point in the office sector may show pricey for the metropolis’s funds.
While business actual property landlords and builders say leasing exercise is powerful and workers will return to the office, many employers say the metropolis’s excessive taxes, lengthy commutes and excessive prices may delay any restoration in the business sector.
By January, solely 13% of Manhattan office workers are anticipated to be in the office 5 days per week, in accordance with the survey. A 3rd can be in three days per week, 15% can be in two days per week, 7% can be in in the future per week and 21% will nonetheless be totally distant.
The trade with the highest anticipated common every day attendance in January can be actual property (80%) adopted by legislation corporations (61%) and monetary companies (47%). The industries with the lowest anticipated attendance in January can be accounting (36%), consulting (30%) and tech (24%).
Wylde mentioned that in addition to workers staying distant, the metropolis is grappling with high-earning enterprise homeowners and monetary companions leaving New York for tax causes and taking their firms and workforce with them.
“The danger is that when the high earners leave, they take operations with them,” Wylde mentioned. “So we hear now of operations in asset management and other areas, not just individual high earners, but the real business operations moving to Texas, to Tennessee, to Florida.”
Wylde mentioned 22% of monetary corporations plan to scale back their New York City-based workforce in the subsequent 5 years — an alarming quantity, on condition that financial-services are the financial spine of New York City.
“What’s going to happen over the next 5 to 10 years in terms of our economic and tax dependence on a population that now knows its highly mobile,” she mentioned.