New York City has a serious and growing problem with vacant office space. Between rising crime, high taxes and crazy pandemic rules from a few years ago, people fled the city in large numbers.
Now the city is home to a record number of empty office buildings. The lack of revenue from these properties is hurting the city’s bottom line, and the current mayor’s policies aren’t helping.
Who wants to spend millions of dollars to open a new office in Manhattan right now?
The New York Post reports:
Manhattan offices set new vacuum record
The Big Apple’s office buildings have never been so empty.
Even though the era of remote work seems long gone, the number of office vacancies in Manhattan just hit a new record.
The District’s office vacancy rate — or how much of that market is currently vacant — reached 18.1% in the first quarter of 2024, the highest rate on record. That’s according to a recent report from investment management firm Colliers, first reported by Crain’s.
By contrast, that figure, which includes offices that are currently vacant and those that will be vacant in the near future, was just 10% in March 2020. Most of the 8% vacancy increase that has occurred since then occurred occurred between 2020 and 2022. .
However, the rate also increased in the last 12 months, when it was 17.1%, and also in the last quarter, when it was 17.9%.
The town hall has more:
As we noted last summer, it’s not just banks that are in trouble: There are individuals and pension funds that have invested in commercial real estate through what have been called “alternative investment” opportunities. With inflation and interest rates reducing the value of these assets and the possibility of loans being called upon, our country is heading towards a situation where a distressed asset relief program will be needed to stop the hemorrhage.
How long will it be before New York seeks a bailout amid the collapse of the commercial real estate market?
(Image: source)