After months of delayed recovery, it appears that New York City is seeing a slight uptick in office occupancy.
However, the city remains overwhelmed with vacancies, and now building owners are looking to revamp their offerings in order to entice people back into the office.
“It’s product not price,” said Howard Hersch, vice chairman of JLL.
Tenants have grown increasingly picky about their workspace options, with many preferring smaller, higher quality spaces. Because of this, modern buildings are outperforming others within the office sector by a great margin.
Not only have occupants become choosy with their office options, but data from Kastle Systems shows that occupancy was still below 50% (42.2%) during the week of June 15.
Data from Colliers also showed that Manhattan’s traditional offices had an availability rate of 17.2%. However, one sector of the office industry seems to have found the right footing: coworking spaces.
The coworking sector has proven to be an ideal alternative in the transition to new work models, particularly for companies that went on hiring sprees during the pandemic and now need a professional space to house those workers.
This trend will likely stick around as more and more companies embrace hybrid work arrangements. In fact, a survey from the Partnership for New York City revealed that 78% of workers expect hybrid models to be the norm moving forward.
“The employees are really running the show,” said Jodie Pulice, CEO of JRT Realty Group.
