Dreaded Commute to the City Is Keeping Offices Mostly Empty
The Wall Street Journal reports that office workers aren't scared to return to the office, rather - they fear the commute. NYC, with a high average commute time, has one of the country's lowest occupancy rates. HERE is a link to the article.
The author observed that businesses catering to commuters have closed, and that retail vacancies in Midtown have soared.
On returning to the office, one worker commented, "If I had a 10 minute commute, it would be fine."
Finally, it was observed that "cities with good infrastructure... are seeing high occupancy because people are able to live closer to work".
Interesting, right? Well, here's my take:
A. Subways are standing room only, restaurant reservations (including restaurants with expanded seating on the sidewalks and in the gutters) are impossible to get, my local sandwich shop and salad bar are both jammed at lunch, Broadway is back, Midtown traffic is insane and City sidewalks are bustling. People may not be going to their offices, but they're here.
B. Manhattan's residential rental market is on fire. People want to be here and are willing and able to pay for the privilege. Rents are up more than 20% year over year.
C. Manhattan's sales market offers some wonderful opportunities. Certain segments of the market are ripe for the picking, and opportunity knocks for savvy buyers. For example, fixer uppers are available at significant discounts. Midtown is on sale relative to Upper East, Upper West and Downtown neighborhoods. Smaller units offer great value. A Midtown office worker looking for a pied-a-terre to crash during the week who is willing to do some work can negotiate a great deal and hit the motherload. Ka-ching!
D. Sellers, despite the recent shift of the market, can also take advantage. Demand remains strong for prime, properly marketed properties that are well priced and show well. Alternatively, homeowners with the intestinal fortitude to be a landlord have the added option of renting at a premium.
The commercial real estate market, the stock market, the financial markets and the residential rental and sale markets are all interrelated. Click or call to understand how your interests are affected by the City's office workers returning.
Please also plan to attend our upcoming Virtual Real Estate Seminar where we will discuss this and other current issues.
Finally, I invite you to share this BLOG with anyone you know thinking about moving or who might otherwise be interested. Thank you in advance.