Could Be Driven By Workers Staying Home
May 6, 2020
A major New York City bank may constrict its commercial space in Manhattan. Other banks may not follow the move that is being undertaken because the financial institution is noting more employees might continue working from home after the COVID-19 pandemic ends.
According to the Commercial Observer, financial-related industries occupy 60 million square feet of the 332 million-square-foot Midtown office market, 26 million of the 123 million-square-foot downtown market, and some 6 million square feet of the 106 million-square-foot Midtown South market, according to CoStar.
In the first quarter of 2020, financial services was among the top two industries in new leasing activity for both Midtown and downtown, according to brokerage CBRE. Indeed, in the former, such leasing deals accounted for 22 percent of all first-quarter activity, behind only the legal industry.
Should financial services start giving back more space, either due to a shift to remote work or consolidation, the market would definitely feel the impact. But such a shift’s effects might not be as profound as some observers might think. That’s because financial services has pivoted before in its New York office usage—and the city itself has changed, especially after clawing its way back from the financial crisis. Any pullback then might not be as acutely felt.
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