Spotify’s headquarters in the United States fill 16 floors of 4 World Trade Centers, a massive office building in Lower Manhattan that first rose to the site of the 2001 terrorist attacks. Its offices will probably never be completed again: Spotify has told employees that they can work anywhere, even in another state.
MediaTek, an advertising tech company, plans to leave its location a few storeys, which it decides during the epidemic because of its new remote-work arrangement.
In Midtown Manhattan, Salesforce, a 630-foot-tall building on Bryant Park’s side, expects workers to be in the office just one to three days a week. A nearby law firm, Loewenstein Sandler, weighs in on whether to renew its lease on America’s Avenue office, where 140 lawyers worked five days a week.
The firm’s chief operating officer, Joseph J. Palermo said, “I can find some people among themselves who think we are about to go back down the path as we were.”
One year after coronavirus Made an extraordinary exodus of workers Office buildings, which seemed like a short-term inconvenience, are now clearly becoming a permanent and tectonic shift in how and where people work. Both employers and employees have embraced the benefits of remote work, including lower office costs and greater flexibility for employees, particularly with families.
Beyond New York, some of the largest cities in the country have yet to see a substantial return of employees, even where there are less stringent government-imposed lockdowns, and some companies have announced that they will back all workers Not going to do time.
In recent weeks, major corporations in Michigan including Ford and aim In Minnesota, it is stated that they are offering significant office space due to their changing workplace practices, while Salesforce, headquartered in the tallest building in San Francisco, said only a small fraction of its workforce is in the office full-time Will remain
But no one in the United States, and perhaps any city in the world, should believe this change more than New York, and especially Manhattan, an island that holds its economy, from the corner hot dog seller to the Broadway theater, 1.6 More than million passengers every day.
Commercial landlords in Manhattan entered 2020 with optimism, riding a steady demand for office space, asking prices in some neighborhoods and the largest construction boom since the 1980s. But he collapsed overnight. Property owners suddenly find themselves chasing after unpaid rent, negotiating a repayment plan with tenants and offering deep discounts to fill the vacant space.
Mayor Bill de Blasio requires about 80,000 municipal office workers in the city To return at the beginning of mayAs a signal to other employers that filling New York’s buildings is the key to its recovery.
“This is an important step for the city, and it is another important step on the path to full recovery of New York City,” Mr. de Blasio said.
Still, about 90 percent of Manhattan office workers are working remotely, a rate that has remained unchanged for months. According to a recent survey Leading employers by participation for an influential business group, New York City, which estimates that less than half of office workers will return by September.
In Midtown and Lower Manhattan, the nation’s two largest central business districts, there has never been more office space – 16.4 percent – for leases, much more than in previous crises, including the 11 September 2001 terrorist attacks and the Great Recession. Is included. 2008.
As more companies push back dates to return to offices and make at least some remote functions a sustainable policy, the consequences for New York can be far-reaching, and not just the city’s restaurants, coffee shops, and other small businesses. For, but also for municipal finance, which relies heavily on commercial real estate.
Sarah Patellos, who is on Spotify’s music team, is working from a dining room table in Trophy, California, a mountain town near Lake Tohe, where she flew for a weekend trip in March 2020 after a previous one Spent most of the year. Stuck due to government imposed lockdown.
Ms. Patellos, who was living in Brooklyn, said, “I love living in the city, but you think about your life, the life you want or the different chapters you want.” “It’s completely life changing.”
Huge office buildings that line Manhattan’s path have long made New York a global powerhouse and the capital of many industries, from advertising to finance.
Now even some of the largest and most permanent companies, including JPMorgan Chase & Co., which have more than 20,000 office workers in the city, have told their work forces that the five-day office workweek is a relic. The bank, which declined to comment for this article, is considering a rotational work model, meaning that employees will move between working remotely and in the office.
In an interview in February, JP Morgan co-chairman and chief operating officer, Daniel Pinto, said, “With 100 percent of people going back to office, I think it has zero chance.” On cnbc. “Just like there is for people working from home all the time, there is zero chance.”
Other large businesses, including accounting firm PricewaterhouseCoopers, marketing group Omnicom Group and advertising giant WPP, have explored the suburbs to handle a significant portion of their Manhattan offices.
The loss of workers has caused the market value of commercial properties to decrease to include office buildings during the epidemic by about 16 percent, triggering a sharp decline in tax revenue that necessitates city services from schools to sanitation. Pays
Real estate and commercial buildings account for about half of the city’s property tax revenue. For the first time in more than two decades, New York expects property tax receipts to decline by $ 2.5 billion in the next fiscal year.
Still, New York is ready to receive significant federal aid From the $ 1.9 trillion federal stimulus packageA City Hall spokesperson said the aid amounted to $ 5.95 billion and another $ 4 billion to schools.
While it addresses the immediate needs, the city faces an estimated $ 5 billion deficit next year and a similar shortfall in the following years, and a changing work culture could affect New York’s recovery.
The amount of office space in Manhattan on the market has risen in recent months to 101 million sq ft, up 37 percent compared to almost a year ago and exceeding all combined city office space in Los Angeles, Atlanta and Dallas. “The trend has shown very few signs of slowing down,” said Victor Rodriguez, director of analytics for real estate company Costar.
However, at least one industry is charging in the opposite direction. Led by some of the world’s largest companies, the technology sector has expanded its footprint in New York during the epidemic. Facebook has added 1 million square feet to Manhattan office space, and Apple has added two floors to the Midtown Manhattan building.
And the increase in available commercial real estate has actually been a boon for some new businesses that have been able to find rental spaces that were there before the epidemic.
Brian S., executive vice president of Newmark, a commercial real estate services firm. “I’ve seen shelter for New York City many times,” said Waterman. “The office will start to recur in May, June and July, and you’re going to have a much fuller occupancy once it hits in September.”
But for now, some workers are at their desks.
According to Kustal Systems, a security company analyzing employee access-card swipes at more than 2,500 office buildings nationwide, only 15 percent of employees have returned in New York City and the surrounding suburbs in a little over 10 percent. Only San Francisco has a lower rate.
The labor shortage has paralyzed some of the city’s largest real estate companies. SL Green Realty and Vornado Realty Trust, the owners of two of New York’s largest office spaces, and Empire State Realty Trust, which owns the Empire State Building, lost a total of $ 6.5 billion in market value.
The sharp drop has inspired developers Rally behind an idea It seemed unimaginable before the epidemic: the conversion of distressed office buildings into low-income housing in Manhattan.
Record vacancy rates have been driven by companies from almost all industries, from media to fashion, who have discovered the benefits of remote work.
In addition to the cost savings of operating a scale-down office or no office at all, modern technology and communications have allowed workers to stay connected, collaborate remotely, and be more productive without prolonged traffic. Parents are also struggling for greater flexibility to care for their children.
“We believe that we are on top of the next change, which is distributed age, where people can be more valuable in how they work, which doesn’t really matter with spending your time,” said Alexander Westerdal, Vice President of Human Resources at Said Spotify, a Stockholm-based streaming music giant with 6,500 employees worldwide.
For now, Spotify has not planned to reduce its New York footprint, but as of February, the company told its United States employees – 2,100 of whom had worked in a Manhattan office – that they could get a lot from anywhere. Could work
“The change is primarily driven by globalization and digitization, and our tools are much better able to allow people to work from anywhere,” Mr. Westerdal said.
Distance work, of course, is not without significant degradation.
The already existing blurred lines between work and personal life have all been erased during the epidemic. Without spending time in the morning and night, people are logging on to work earlier in the day and stay connected later in the night.
And despite modern technology and video conferencing capabilities, companies are struggling to foster workplace cultures and build employees, especially new hires, feel welcome and part of a team.
Authorities at Kelly Drye, a law firm founded in New York in 1836, have voiced concerns over those running from Park Avenue near the 3 World Trade Center near the Grand Central Terminal in Lower Manhattan.
“Zoom and Teams Are Great,” Andrea L. Calvaraso, a lawyer who heads the firm’s trademark and copyright group, but said that “there is no substitute for sitting in a beautiful new colleague and working unhindered.”
But despite being unaffected even after being trapped in Ms. Patellos, California – she had to buy and monitor a keyboard – she soon found herself connecting with her colleagues around the world in the same way as she was in her New York office.
“I fell into a rhythm,” said Ms. Patellos, who is still deciding where to eventually go. “I maintained the East Coast hours, started my days a little earlier and ended a little earlier. Before I knew it, it became the norm and a routine. “