Manhattan offices nearly empty, threatening New York City recovery

Manhattan office workers are working much slower than most other major US cities, taking the risk that New York faces a more disorienting and painful recovery from the coronovirus epidemic than the rest of the country.

Wall Street bankers are back in their glass towers, while real estate companies have tried to set an example by encouraging employees to return to the force. But most of the city’s lawyers, media and publishing workers, tech industry activists and others have stayed away, real estate brokers say.

According to the CBRE group, about 10% of Manhattan office workers returned on September 18 Inc.

A commercial real estate services firm.

This represents only a slight increase from the 6% to 8% that were returned in July, a month after non-labor workers were allowed to return to the city for the first time since offices were closed in March due to an epidemic . Months of nearly empty buildings running for months have led to a debilitating knockout in Midtown Manhattan and other business districts, which led to the closure of many small shops and restaurants.

Nationally, about 25% of office workers are back this month, according to real estate services firms. Some large metropolitan areas are significantly higher, such as 40% in Dallas and 32% in the Los Angeles metro area, industry professionals say. According to CBRE, the New York suburban area has a rehabilitation rate of 32%, which manages 20 million square feet of office property in the area.

Plexiglass dividers and floor decals may not be permanent, but the epidemic will bring permanent changes in offices. Experts in the architecture and real estate industries share how they are getting back to work and what offices will look like in the future. Photo: Cesare Salerno for The Wall Street Journal

The tech-heavy San Francisco area is also struggling, with office occupancy in the 15% range. Technology companies, which are more used to remote work than other businesses, have been the slowest to return to office. Some like facebook Inc.

And twitter Inc.

Has announced plans to expand the work well from home in the future.

The low rate in New York has frustrated city officials, who were counting more people returning to work after Labor Day. Many private schools reopened earlier this month and many New York families returned after leaving the city in the summer.

Whereas New York City struggled to contain the virus in the early spring, it now has a much lower per capita rate of new Kovid-19 infections than in many cities where a high percentage of the workforce is back at their desks .

“We all expected [the re-occupancy rate] Being close to 20% to 25%, which is happening around the rest of the US, ”said Mary Ann Tighe, chief executive officer of CBRE of the New York area.

But many civic and business leaders say New York’s reliance on mass transit – and the concern that new coronoviruses can spread via subways, buses or regional trains – are causing many people to work from home. In cities where the number of passengers driving is high, there is a higher percentage of workers.

Some also say that the delay in the reopening of New York’s public schools has made parents reluctant to return to office if it means leaving children alone at home.

Wall Street bankers are tricking back to their glass towers.


Spencer Plot / Getty Images

While most front-line employees in New York City have returned to work, Mayor Bill de Blasio has not announced plans to roll back the city’s thousands of white-collar workforce, further disappointing office voting. A spokesman for the mayor said, “We will continue to issue updated guidance to city workers, as we proceed to a full withdrawal.”

The New Yorkers’ slow return to the workplace is the latest setback for the nation’s largest city, which also suffers from homeowners massively fleeing Manhattan, rises in murders and homeless, and Broadway theaters, museums and other popular Closed or Partial Closing Attraction.

Lack of staff at their desks can also have long-term consequences for the city’s economy and tax base. The Metropolitan Transportation Authority, which relies heavily on commuter revenue, is facing a $ 12 billion shortfall by the end of 2021 and is considering a crippling service cut. Manhattan’s low office turnout has also contributed to the sales tax and a $ 9 billion drop that the city government is offering for its fiscal year that begins July 1.

Nearly two million people worked daily in the epidemic’s central office districts, mostly white-collar workers, but also employees of bars, restaurants, stores, and other businesses. Many times thriving outlets that rely on office workers for business are already called quits. This has helped the city’s unemployment rate reach 20% during the summer, the highest rate in more than 40 years.

Cafe Metro, a quick-service restaurant down the block from the MetLife building in Midtown, is closing early next month. At the start of lunch on Thursday, the first bustling restaurant was almost empty with just one food customer and the other placing an order.

“Ninety percent of our revenue depends on office workers and another 10% on tourists,” said Edison Castillo, the restaurant’s manager. “We have lost both ways. I used to have 55 employees in both morning and night shifts. Right now we are below six. ”

New York business and civic leaders say they do not expect a surge of returning workers anytime soon.


Sarah Bulleson for The Wall Street Journal

Kamakura Shirts, a high-end Japanese dress-shirt store located blocks away from the Grand Central Terminal, said it is closing later this year. Store manager Kakeru Kitsuru said that sales had dropped by 70% since mid-March.

“Because we are located on Madison Avenue, a lot of the employees around here are our customers,” he said.

Business and civic leaders from New York say they do not expect an increase of workers returning soon, but some are hoping that momentum is picking up. Public schools are starting again after the delay of the previous week and partial indoor feeding is starting this week. The city’s shopping malls and gyms have also recently opened their doors again.

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Nevertheless, legal considerations remain an issue, not just in New York. Business owners feel exposed to employee lawsuits if they require workers to return and some become infected.

“Businesses are not able to force their employees to do anything in this situation,” said Catherine Wylde, partnership chief executive for the New York City Trade Organization. “Or they do so at their own risk.”

JPMorgan Chase & Co. is an exception. This month, the bank told senior sales and trading employees that they needed to return to work unless they had childcare issues or medical conditions. About 25% of the bank’s New York City employees are reporting every day.

About 25% of New York City employees at JPMorgan Chase are reporting every day.


Michael Nagle / Bloomberg News

More common businesses have been offered the option to return. Citigroup Inc.

He said it would allow more employees to return on a voluntary basis.

A City spokesperson said that 30% of New York employees indicated in a survey that they wanted to return to the workplace. That level is safe and brings enough people to the office “to create a good discussion,” she said. Still, only 5% of its Manhattan workforce is back, the bank said.

Deutsche Bank AG

Told New York City employees that they don’t have to return until July.

Some businesses are trying to woo employees with free food, transportation or other incentives. Citi is providing a 40-day subsidy to support caregiver children, nanny placement services and caregivers to monitor online learning. Hurst Corp’s benefits include free parking in the city and additional child care reimbursement.

But for some New Yorkers who remember the early weeks of the epidemic when rates of illness and death were among the highest in the world, complimentary parking may not be enough to bring them back to Midtown and mix with the crowd. Chris Jones, senior vice president of the Urban Planning Organization, Regional Planning Association, said many people were traumatized.

“There were frightening sirens every night,” he said. “It was a psychological effect.”

Write Peter Grant at [email protected]

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