New York City has a serious and growing problem with empty office space. Between rising crime, high taxes, and the crazy rules of the pandemic a few years ago, people have fled the city in huge numbers.
Now the city is home to a record number of empty office buildings. The lack of revenue from these properties has got to be hurting the city’s bottom line and the policies of the current mayor are not helping.
Who would want to spend millions of dollars to open a new office in Manhattan right now?
The New York Post reports:
Manhattan offices set new record high for emptiness
Big Apple office buildings have never been so empty.
While the peak era of remote work may feel long ago in the past, the number of vacant offices in Manhattan just hit a new record.
The borough’s office availability rate -– or, how much of that market is currently unfilled — hit 18.1% in the first quarter of 2024, the highest rate ever recorded. That’s according to a recent report by investment management company Colliers, Crain’s first reported.
In contrast, that number, which includes currently empty offices and those that will be empty in the very near future, was just 10% back in March 2020. The majority of the 8% vacancy increase that has occurred since then happened between 2020 and 2022.
Still, the rate has gone up even in the past 12 months, when it was 17.1%, and even last quarter, when it was 17.9%.
Townhall has more:
As we noted last summer, it’s not just the banks who are on the hook—we have individuals and pension funds that have invested in commercial real estate through what has been dubbed “alternative investment” opportunities. With inflation and interest rates chipping away at the worth of these assets and the possibility of loans being called, our country is barreling toward a situation where a Troubled Asset Relief Program will be needed to stop the bleeding.
How soon before NYC is looking for a bailout due to the crash of the commercial real estate market?
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