Nearly two-thirds of NYC workers expected back in the office by September. What’s the impact on real estate?
New York City employers expect nearly two-thirds of workers will be back in the office by September and most will come in three days a week, according to a new survey from the Partnership for New York City.
Why September? It makes sense from a scheduling point of view—workers can get their vacations and summer fun in (much easier when you're working remote). But the rental market is getting increasingly competitive here. New Yorkers who left the city during the pandemic and are planning to come back in order to return to the office—and perhaps for a new school year when public schools will be in person—may find timing a new lease for September tricky.
The April rental market saw a surge of new lease signings (May data will be available shortly) thanks to renters taking advantage of lower rents and landlord concessions like multiple free months. That demand is eating into available inventory. There are still a large number of empty apartments, but brokers say that landlords are becoming increasingly less inclined to offer the generous concessions seen in the earlier part of the year.
For some new renters, negotiating a lease that starts later—allowing for a delayed move in and locking in current rents and concessions—is a growing request.
The Partnership survey found that the total share of office employees expected to return by the end of September 2021 is 62 percent; a 37 percent increase since a March estimate of 45 percent.
The majority (71 percent) of employers plan to adopt a rotating or hybrid office schedule with a mix of in person and remote work. For employers implementing a hybrid model, most (63 percent) will require employees to be in the office three days per week, the report says.
A major shift to a three-day, in-person schedule could have a profound impact on NYC real estate, brokers told Brick Underground previously. New Yorkers are more likely to tolerate longer commutes if they are less frequent—in exchange for larger and cheaper places in the outer boroughs—a trend that appears well underway.
But those workers will still have to rely on the subway to get the office, and the biggest obstacle to returning to the office: 84 percent say it is a concern about personal safety on mass transit—not cleanliness, which was a greater concern in previous surveys.
Notably, the real estate industry has been the most aggressive in bringing employees back to the office, according to the survey, with 70 percent of real estate employees currently in the office (the next highest industry, financial services, has 14 percent of its employees back in the office). Real estate employers expect 90 percent of employees to return by July 2021 and nearly all (98 percent) back by September.
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