End of some pandemic restrictions in New York sparks real estate optimism – Trade Observer
When the governor Kathy Hochul lifted New York State’s mask mandate early last month, as coronavirus cases in the state began to decline, she called the move a sign of “tremendous progress after two long years” of the pandemic.
As mayor Eric Adams plans to remove the vaccination requirement for indoor restaurants, gyms and entertainment venues as early as March 7 if coronavirus cases continue to decline, the city’s real estate community hopes the reduced precautions will encourage workers to return to office towers .
“[I’m feeling] cautiously optimistic,” said Jordan BarowitzVice President of Public Affairs for The Durst Organization. “Vaccination rates are high, COVID-19 rates are low, and treatments have improved. We cross fingers. »
And office occupancy in buildings owned by Durst has been steadily increasing recently. In December 2021, Durst’s office portfolio in New York had an occupancy rate of around 45%, but this fell to around 10% in January thanks to the omicron variant. However, it rebounded to 20% in February and just above 40% at the end of that month, Barowitz said.
Durst is not the only one to see the occupancy rate go up.
The 51 buildings, mostly class A, which JLL operates in Midtown and Downtown recorded an occupancy rate of 19% in January and 27% in February, according to Caroline GadaletaGeneral Manager of JLL and Head of Tri-State Property Management.
“The mere thought of loosening mandates gets people back to work,” Gadaleta said. “I would say that in general people have been very obedient when it comes to these warrants. They want to do the right thing. They want to take care of their fellow human beings. But now that [the rules are] the easing, I think, combined with the fatigue and the urge to move on from COVID-19, it creates momentum for both businesses and individuals.
Industry Trade Group New York Real Estate Board (REBNY) expects more workers to resume their morning commutes if the pandemic continues to subside. Coronavirus cases in New York have been on the decline since January at less than 1,000 cases per day and deaths have also fallen, according to city data. At the same time, 86% of the city’s inhabitants are partially vaccinatedand 77% are fully immunized.
“The gradual lifting of restrictions following advice from public health experts is a sign that things are moving in the right direction for New York’s real estate industry and broader economy,” Zachary Schechter-Steinberg, senior vice president of policy at REBNY, said in a statement. “As infection rates continue to decline after the omicron wave, we expect increasing numbers of employees to return to the office, as we saw in November and early December.”
But the end of pandemic-era restrictions doesn’t necessarily mean the end of working from home, said Joanna Frankthe chairman and managing director of Active Design Center, a company that helps design healthy buildings. Over the past two years, employees have proven that in many industries the desk is not the only way to do their jobs and companies will need to do more than just ask their employees to return to their desks.
“Removing the restrictions won’t make a difference as to whether your employees start coming back into thehe office – it’s a piece of the puzzle, but it’s not what’s stopping people from going back to the office right now,” Frank said.
Owners and businesses will need to prove that their spaces are beneficial to a worker’s mental and physical health because employees always have the choice of working for a company that offers more flexibility in the workplace, according to Frank. While employees in office buildings tend to be less stressed than those who log on from home, Frank said companies need to communicate this message clearly.
It’s no secret that real estate executives and politicians want workers back in officer towers, arguing that it supports the city’s economy (although it certainly won’t hurt the bottom line net of an office owner to have tenants). During his short time as governor, Hochul has has called on companies twice to bring his employees back to the office and Adams criticized work-from-home policies last month saying, “You can’t stay in your pajamas all day.
At the national level, the President Joseph Biden and its management plans on accelerating the return of federal civil servants at the office, Axios reported. (The former mayor Bill de Blasio previously called New York city workers back in the office in May 2021.)
For local businesses still reeling from the effects of the pandemic, Randy peersPresident and CEO of Brooklyn Chamber of Commercecalled for lifting the vaccination requirement for indoor dining and other key venues to establish a sense of normalcy.
“We must continue to be safe and vigilant in protecting ourselves against COVID-19, but Adams lifting the vaccine requirement is an important step for the 62,000 small businesses and workers in Brooklyn who are ready to restore a sense of normalcy to the borough and to accelerate the economic instability of the city. recovery,” Peers said in a statement.
But for office workers who like to visit local small businesses, the world likely won’t simply go back to the pre-pandemic days of spending at least 40 hours a week in an office building, Gadeleta said.
“I think a big result of COVID will be more flexibility for everyone,” Gadaleta said. “Now it seems like everyone wants to get on the flexibility bandwagon. … It’s obvious to me that landlords think very deeply about how to partner with their tenants, to help attract people to buildings.
Celia Young can be contacted at [email protected].