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By: Hadassa Kalatizadeh
The latest analysis from the Real Estate Board of New York found that office building “visitations” present a less pessimistic view of the reportedly troubled commercial property market.
As reported by Realty Check, in the past few months, Manhattan saw office attendance continue to inch up towards recovery, as more companies are requiring employees return to their desks. Since the pandemic began, creating the work-at-home culture, industry experts have been worried about a commercial real estate crisis, predicting foreclosures and a long path to recovery. The recent REBNY data calculates office attendance as a percentage of pre-pandemic 2019, which accounts for the fact that offices were well below 100% full on any given day even before the pandemic.
The report from Keith DeCoster, REBNY director of market data and policy, found that Manhattan office attendance in March reached 74% of 2019 levels and 75% in April. Both rates were higher than 70% in March of 2023. The rates are based on Placer.ai location data in some 350 major Manhattan buildings, compiled using cell phone data.
Per the Post, the data revealed that Class A-plus properties saw 82% visitation rates in March, relative to 2019, and 89% in April. Visitation was also healthy at 72% in Class B and C buildings. The high occupancy in top “trophy” buildings was not a big surprise, as buildings including One Vanderbilt, One Bryant Park, One World Trade Center and several Hudson Yards towers have already reported up to 95% daily attendance. DeCoster said, “We are seeing office activity incrementally edge closer and closer to pre-pandemic levels, led by the highest quality properties.”
As expected, visitation was highest on average in Midtown Manhattan buildings, with 76% in March and 78% in April. In Downtown Manhattan, visitations improved too, reaching 66% in March and April, up from 54% in February.
Zach Steinberg, REBNY senior VP for policy, clarified that the attendance data includes visitors to retail stores inside office buildings. “We’re considering a building’s entire ecosystem,” Steinberg explained. While this factor was not previously clarified, it is the same way data for 2019 was compiled— also “included visitors to stores and restaurants in office buildings, so we’re still comparing apples and apples,” Steinberg said.
A recent survey by the Partnership for New York City found similar results. The nonprofit group found that between April 19 and May 6, office attendance was at 72% of pre-pandemic levels. Per the Post, the encouraging data brushes off doomsday claims that office buildings are at only at half the capacity compared to pre-pandemic levels. In March, one such article in the NY Times had said, “Even with more people physically returning to work, the office occupancy rate is still roughly 50 percent of pre-pandemic levels by one measure.”
The article referred to the Kastle Systems Back to Work Barometer, which tallies weekly office attendance, taking a tally using card swipes only in buildings that use Kastle’s security services. The barometer has since been largely discredited, being that it mainly only counts attendance at buildings owned by the city’s 11 largest landlords, many of which are prewar buildings in secondary neighborhoods.
It should be noted that landlords are also still struggling with high interest rates and companies downsizing and consolidating.
