2021: The Road to Recovery
When Commercial Observer crunched the annual numbers this time last year, we felt a certain sinking feeling in the pit of our stomach. It was like waiting on a report card for a semester we knew we flubbed.
And, indeed, 2020 met most of our gloomiest expectations. (The headline that CO chose for our final cover of 2020 was: “Worst. Year. Ever.” Comic Book Guy from “The Simpsons” himself couldn’t have said it with greater emphasis as far as we were concerned.) Of course, some of this had nothing to do with real estate. There was major political discord. We had been through waves of the virus and only recently had we learned that vaccines were coming. We had been waiting at home … and waiting … and waiting.
Whatever you want to say about 2021, it wasn’t 2020.
It was better. Considerably better. And it’s getting progressively better still. Midtown South leasing has experienced five months of positive growth. Multibillion-dollar deals, like Google at St. John’s Terminal, have been agreed to. Flex office companies like WeWork, which had been bleeding dollars and customers at the beginning of the pandemic, have stabilized and even gone public. Big gambles like SL Green Realty Corp.’s One Vanderbilt have paid off even better than they might have in an upmarket, with the Grand Central Terminal area building fetching record rents and leasing most of its inventory.
And yet office tenants have stubbornly remained at home.
Real estate seemed to believe that a flip would switch once vaccines were introduced. All the machinery that had been dormant for months and months could come to life — including a mass return to office, which would mean renewed business for retailers and restaurants. Whatever the spin, and whatever the perfectly valid nuggets of good news out there, this hasn’t happened yet.
There has been a surprising (and, one could argue, perverse) movement not to take the vaccines. And, with this stubborn refusal, we never achieved the kind of herd immunity that we were depending on to get back to normalcy. Variants spread in the wake of this. There were outbreaks. It didn’t feel worth it to get onto a subway or a highway when the work was waiting for you just as simply in your living room.
But local and national politicians, as well as businesses, have also decided not to sit on their hands. They have instituted mandates. Boosters became available to the sick and the elderly … then to all adults. Children became eligible for the vaccine. Drug companies announced new treatments and therapies for COVID that will help even the unvaccinated.
It has been a long road. It is not over yet. The report card won’t be all As. But it’s not all Fs, either. Take a look at these three roundups to get a sense of New York’s real estate market in 2021 — not the worst year ever.