for Bloomberg: New York’s Selective Return to Office Is a Problem by José A. Alvarado Jr.

News

for Bloomberg: New York’s Selective Return to Office Is a Problem

josé a. alvarado jr.

May 22, 2025

Summary

Amenity-rich buildings are filling up fast, with landlords already pointing to a supply crunch. Older spaces are unloved.

New York City encapsulates the two-sided recovery of the US office market currently underway. Millions of square feet of antiquated office space await repurposing or demolition across Manhattan, while trophy buildings in Midtown are full. At a time when the city is trying to address its long-running housing shortage, it will soon run into the additional challenge of creating more of the kinds of office space that employers and workers want.

Corporate tenants have shown a clear preference for the best buildings in the best submarkets — partially because it’s what they need to convince employees of the importance of the in-office environment, and partially because it’s risky to take space in a half-occupied older building with an owner who may face foreclosure in the future. Rents in good-quality buildings have the potential to surge over the coming years, which is why Blackstone Inc. is close to buying an office tower in Midtown. Office real estate investment trusts that hold prime properties look increasingly well positioned, with rising occupancy rates and access to financing to take advantage of distress elsewhere.

Photographed for Bloomberg, with words by Conor Sen.

https://www.bloomberg.com/opinion/articles/2025-02-03/new-york-s-selective-return-to-office-is-a-problem

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José A. Alvarado Jr.

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