Just as tech workers are leaving Silicon Valley to work from home across the U.S., leaving the office space of tech giants half-empty, Manhattan’s financial district also faces a mass exodus, Business Times reports.
Commercial real estate analytics provider CoStar reports that the lower Manhattan, specifically the financial district, is facing an 80% increase in sublease space available – more than double the 36% of available space in Midtown, Business Times reports.
JP Morgan Chase & Co. is the latest seeking to flee the financial district, Business Times reports. In December 2020, the New York Post reported JP Morgan Chase CEO Jamie Dimon was considering moving the financial institution’s headquarters to Miami.
Similarly, financial firm Goldman Sachs has also been looking at South Florida real estate, sources told Bloomberg.
S&P Global, Uber Technologies Inc. and Conde Nast publishing are also looking to leave the area. S&P Global and Fitch are seeking to sublease their prime real estate space, while Conde Nast and Uber are exploring offices elsewhere in Manhattan or different states entirely. The latter two moves indicate that the exodus stretch beyond high-profile financial services firms.
However, the World Trade Center complex, home of the Freedom Tower, shows healthier occupancy rates than elsewhere in lower Manhattan. One World Trade is 90% leased, Business Times says, with rents going for $75/square foot, according to Eric Engelhardt, senior managing director of commercial leasing at The Durst Organization, a property management firm with real estate in the World Trade Center. Across the area, rents fell to $61.59/square foot in February, which Business Times reports is the lowest price since February 2016, according to a report from brokerage Collier.
For the short-term, Wall Street and the vicinity may seem to be a ghost town as people work from home. But some property managers are optimistic that it will bounce back. “At some juncture it will come back to some sense of normalcy,” says Daniel J. Wollman, CEO of Gumley Haft, a New York City-based property management firm. “Although it’s not the best analogy, some people compare it to 9-11. People said no one would ever live or work downtown again. And then another generation of kids came in.”
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