Value Of Manhattan Office Towers Plummets
The New York Times has reported that the market value for Manhattan office towers has dropped by 25% over the past year, contributing around a $1 billion plummet in property tax revenue.
This is largely due to big companies like JPMorgan Chase and Target letting go of office space not only in New York, but across the country.
For instance, United Airlines gave up over 150,000 square feet of space in Chicago’s Willis Tower.
According to Jamie Dimon, CEO of JPMorgan, remote work has been the leading cause for the company to decrease its office footprint.
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In the meantime, property owners who have relied on long-term leases throughout the pandemic could struggle to fill in those spaces once the leases have expired.
At the moment, 17.3% of Manhattan office space is up for lease, which is the highest in decades. Asking rents have also fallen from $82 per square foot in early 2020, to $74 today.
However, some landlords are banking on employees who do want to return to the office needing more space to physically distance in accordance with pandemic-related guidelines.
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