By:  Ilana Siyance

Commercial real estate got optimistic news today, with the Real Estate Board of New York (REBNY) releasing a new analysis of Placer.ai location data for Manhattan office buildings.  The new report compares 2023 building visitations to pre-pandemic levels, revealing that more companies are pursuing a slow-but-steady return to the office for employees.  The report, released Monday, found that mid-week employee workplace visits are on average 73% of their comparable levels in 2019, based on a same-day visitation rate through the first 16 weeks of 2023.   The report also found that employee workplace visits peak on Tuesdays, reaching 70% of pre-pandemic levels.

“This report makes even clearer that employee visitation rates continue to rebound strongly during mid-week days, while total office building visitation rates are also growing throughout the week, even amid hybrid work policies,” said Keith DeCoster, Director of Market Data and Policy at the Real Estate Board of New York, who wrote the report. “Total building visit rates are key to understanding the full impact of office properties in New York City’s economy as the nucleus for so many retail businesses, cultural destinations and a growing number of schools and medical facilities.”

REBNY made it a point to note that the buildings were not at 100% full occupancy even before the pandemic. “It would be inaccurate to define full recovery of the office market as returning to 100% occupancy” — which it calls “a goal line that never existed.” Even pre-pandemic, offices were only “occupied by employees at 80% of their total capacity for around four days a week,” per REBNY.  The previous REBNY report, released in May, had also highlighted a year-over-year increase in building visitations, and had noted a widening gap between activity in prime Class A office buildings versus other property classes.

REBNY’s study released today used proprietary data from Placer.ai to measure a sample of 50 key Manhattan office buildings, in which an algorithm was used to identify employees’ mobile-devices to count visits. It found that employee office visits on Tuesday through Thursday in the first five months of 2023 averaged 68% of 2019 levels.  The number of visitations were lower on Mondays, falling to 56% of 2019 levels, and on Fridays were just 37% of the pre-pandemic levels, according to REBNY.  This finding, especially midweek, is substantially higher than the roughly 50% estimate for Manhattan previously reported by the Kastle Systems Back to Work Barometer.

As reported by the NY Post, the 54-story skyscraper at 787 Seventh Avenue, located between 51st and 52nd Streets, was less than 20 percent occupied in the summer of 2022.  Now, the building is “mostly full except on Fridays,” said CBRE power-broker Howard Fiddle, the building’s leasing agent.  “They brought their people back midweek,” Fiddle said. “And Monday is picking up too.”

Fiddle agreed with the REBNY’s optimistic findings.  “I believe the return-to-office numbers are empirically up,” he told the Post. “Nobody says they’re seeing fewer people in the office.”  He made the distinction, however, noting that Midtown’s Class-A properties are in better standing than Midtown South or Downtown, because “financial and law firms want their people back.”  “Walk up or down Park Avenue and everything’s full,” Fiddle said, adding that this is less true in other parts of Manhattan where tech and creative industries can more easily allow employees to work remotely.