Why coworking spaces rely on the suburbs

A recent analysis by Fitch Ratings concluded that if companies were to adopt just a day and a half of remote work per week, office owner profits would drop by 15%. At three days, earnings would be reduced by 30 percent.

Jim Whelan, chairman of the Real Estate Board of New York, a lobbying organization that represents major developers, said his staff had to work five days a week in the office since the summer. He believes buildings will fill up as cheaper commercial rents will encourage businesses to re-lease in Manhattan.

He questioned why employees would use a co-work site during their work-from-home days and dismissed the possibility of employees working remotely part of the week after the pandemic, calling it “your alternate universe” .

“Over time, we’ll be working a five-day-a-week schedule,” Mr. Whelan said. “There are signs that the commercial market is accelerating in terms of rentals and in terms of the number of tenants looking for space.”

In the New York City area, about 32% of employees were in the office as of mid-October, according to Kastle Systems, a security company that tracks employee card swipes in office buildings. The percentage has risen steadily since Labor Day, but is still half of what employers predicted in a June survey by Partnership for New York City, a business advocacy group.

A bigger calculation around office space could take place in the coming years, as about 30% of leases in large Manhattan buildings will expire by 2024, according to the New York State Comptroller’s Office. A major question, economists say, is whether large companies will keep their offices to guarantee seats for all employees, regardless of the number of days per week they enter.

New York City office buildings are worth around $ 172 billion and provide around 20% of the city’s property tax revenue. As new leases plummeted during the pandemic, building values ​​plummeted by $ 28.6 billion, the first drop in at least 20 years, according to the New York State Comptroller’s Office, costing the New York State Comptroller. city ​​over $ 850 million in property taxes.

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