Finally, good news for New York City’s office landlords as office occupancy pushed past 40 percent for the first time since the start of the pandemic. The Kastle Back to Work Barometer increased to 41.2 percent. Kastle Systems measures office occupancy by entry into office buildings.
“This is good news for our city’s recovery as the presence of office workers in the central business district is critical for retail, restaurants and other storefront businesses hit hard by the pandemic,” James Whelan, president of the Real Estate Board of New York, told The City.
Occupancy has surged in the past few months. Toward the end of last year, attendance cratered as the Omicron variant gave New Yorkers a serious scare. Occupancy levels dipped as low as 10.6 percent.
Even as more workers report to their desks, the overall office picture remains gloomy. A recent report from City Comptroller Brad Lander estimated that office value declines could cost the city $600 million in annual property tax revenue. The city’s office market has a vacancy rate of 16 percent, while the sublease vacancy rate is 5 percent; both are higher than they were during recent economic crises.
A recent analysis from a team at NYU estimated that by 2029, the city’s office buildings will drop in value by 28 percent, or $49 billion.