NYC’s Return to Office Outpaces Much of the US, but Midtown Still Struggles

reprints


New York City’s return to office is going better than many other cities in the U.S., but office occupancy in Midtown and Lower Manhattan is still down significantly compared to pre-pandemic numbers, according to recent reports from Placer.ai

The data analytics firm found that weekday office visits in Midtown in the second quarter were down nearly 30 percent compared to the same period in 2019, while visits dropped 16 percent in the Financial District during that same time. However, both neighborhoods have recovered somewhat from the second quarter of 2022, with office workers coming into Midtown 16 percent more frequently and into Lower Manhattan 15 percent more often.

SEE ALSO: Peterson Companies Plans Big Office-to-Resi Conversion in Fairfax, Va.

Similarly, the fraction of Pennsylvania Station commuters who came from office buildings nearly rebounded to pre-pandemic levels in the first half of 2023, reaching 19 percent compared to 20 percent from January to June of 2019, according to Placer.ai. Grand Central Terminal’s numbers were slightly better than they had been pre-pandemic;18 percent of commuters returned from the office between January and June 2023, compared to 17.5 percent during the same period four years ago. 

Many large employers in the city, including Goldman Sachs and Citigroup, have been pressuring workers to come back to the office at least three days a week. But Manhattan has plenty of vacant office space, with availability hovering around 18 percent, according to Colliers’ most recent market report. 

Overall, New York outpaced the average rate of workers returning to the office nationwide, Placer.ai found. Visits to the city’s office buildings in June were down 14 percent compared to January 2020, in contrast to a 32 percent decline in office visits nationwide from the pre-pandemic baseline. 

As of last week, Washington, D.C. had the best return-to-office rate of any major city that Placer.ai tracks, with visits down 22 percent compared to 2019 and up 36 percent year-over-year. New York came in second place, with visits down 24 percent from 2019 and up 16 percent from 2022. 

San Francisco had a surprising rebound, amid discussions of record office vacancy Downtown and an extremely sluggish tech office leasing market. The Northern California city saw a 38 percent increase in visits from August 2022, but office attendance remained down by a whopping 56 percent compared to 2019. 

“While San Francisco office foot traffic dipped slightly in July 2023 compared to the month before, it remained higher than it’s been at any other time since COVID,” Placer.ai researcher Lila Margalit wrote. “Other cities too — including New York, Denver, Boston and Chicago — saw the most office visits in July 2023 that they’ve seen since before the pandemic.”

Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com.