As New York City prepares to allow companies to reopen their offices on Monday following a three-month coronavirus lockdown, many workers are fearful about going back in.
Real estate brokers and landlords are anticipating that only 10 to 20 percent of Manhattan’s office workers will return to their desks this week amid fears of another wave of infection.
Though they expect that figure to increase gradually over the coming months, there are growing concerns that many companies will stick with the work-from-home model permanently to save money on expensive office space.
Most firms are proceeding with caution as New York City enters Phase 2 of the reopening plan, which allows all of the city’s 300,000 office workers to go back to work, as well as outdoor dining at restaurants and service at businesses like hair salons.
Some are opening with reduced occupancy and giving employees the option to continue working from home, while others plan to keep offices closed entirely for the foreseeable future.
The reluctance to reopen offices could prolong New York City’s recovery from crushing economic losses suffered during the pandemic, particularly in neighborhoods like Midtown where businesses depend on week-day traffic.
Up to 90 percent of employees may not report to their offices when New York City allows all 300,000 to return on Monday due to fears of new coronavirus outbreaks, experts say. Pictured: Two men in suits walk past a shuttered WeWork office building in May
Mary Ann Tighe, chief executive for the tri-state region at CBRE Group Inc, told the Wall Street Journal that many of the real estate services firm’s New York City clients don’t plan to be fully back in the office until Labor Day – if not later.
Tighe said the main concern is having outbreaks strike within offices, where shared spaces like bathrooms and coffee stations could become breeding grounds for the virus.
They’re also worried about commuting bottlenecks if public transit limits the number of riders on each subway car or bus.
NYC PHASE 2 REOPENING
Open under Phase II:
- Outdoor dining at restaurants
- Retail – in-store shopping, rental, repair and cleaning, barbershops and hair salons with limited service, motor vehicle leasing, rental and sales
- All office-based jobs – professional services, administrative support, information technology
- Real estate services – building and property management, leasing, rental and sales services
Establishments that must remain closed:
- Malls, gyms, movie theaters and similar public gathering places
- Nail salons
- Indoor dining at restaurants and indoor service at bars
- Places of public amusement -amusement parks, carnivals, water parks, aquariums, zoos, arcades, fairs, children’s play centers, funplexes, theme parks, bowling alleys, family and children’s attractions
New York state guidelines stipulate that companies can have no more than 50 percent of the maximum occupants present in the office at a time.
Employees must maintain six-feet of distance between each other and must use mask when in communal areas.
Many landlords are expected to require employees to submit to temperature checks and health evaluations each time they enter the office. Some buildings have installed thermal cameras at entrances as well.
Companies are also encouraged to institute their own additional safety guidelines depending on their individual spaces.
Still, many firms are in no rush to return, in part because working from home worked better than they anticipated.
Twitter Inc, for example, announced last month that its employees can work from home indefinitely. The social media giant is not planning to reopen its New York City office at all on Monday.
Ad giant Interpublic Group of Cos, which employees nearly 10,000 people in the Big Apple, told employees they would continue working from home until at least Labor Day.
Fellow ad firm Omnicom Group Inc said it would wait up to four weeks to begin bringing people back into the office, and that returning will be voluntary.
A recent global survey by trade group CoreNet Global found that just 15 percent of companies said their office occupancy will be back to pre-pandemic levels within six months, while 38 percent said it would take more than a year.
The lack of enthusiasm has already been seen in other states that reopened weeks ahead of New York.
In Georgia, the first state to begin reopening in April, office occupancy remained at less than 75 percent of pre-pandemic levels in mid-June, according to Openpath Security Inc.
A trader walks toward the New York Stock Exchange in Lower Manhattan on June 17 after financial employees were allowed to return to work under Phase 1 of the state’s reopening plan
Real estate firms are showing less reluctance than companies in other industries – which is unsurprising given that they will be hit the hardest if companies stop leasing office space.
Brookfield Property Partners is allowing about half of its 700 New York City employees to return to the office on Monday, and expects around 200 to show up.
‘We felt it was really important, as the largest office landlord in the world, that we demonstrate leadership in returning to the office,’ Brookfield CEO Brian Kingston told WSJ.
RFR, located in the Seagram Building on Park Avenue, is likewise encouraging its 60 employees to work from the office four days a week.
Empire State Realty Trust, which owns the Empire State Building, expects a third of its employees to return to its offices within a week of reopening on Monday, CEO Anthony Malkin said.
Silverstein Properties is implementing a staggered approach wherein employees will be split into three groups, each spending two days in the office.
The reluctance to reopen offices could prolong New York City’s recovery from crushing economic losses suffered during the pandemic, particularly in neighborhoods like Midtown where businesses depend on week-day traffic. An empty Times Square is seen on June 8
Landlords are hopeful that companies in the Big Apple will surpass bleak projections for workers returning to offices, stressing the importance of population density on the city’s economy.
‘That human social contract relies on everybody showing up,’ Michael Phillips, president of landlord Jamestown LP, told WSJ.
Phillips estimated that Jamestown’s employees will start returning to its Manhattan office in July.
While landlords continued to collect rent even when buildings were empty, surrounding businesses such as restaurants, bars and shops have suffered without office workers frequenting them each day.
The New York City Independent Budget Office estimated in April that the city could lose 475,000 jobs over the next 12 months, with sales-tax revenue dropping 36.4 percent in 2021 compared with its pre-pandemic projection.
As of Sunday New York City has recorded more than 208,760 coronavirus cases, 17,563 confirmed deaths and 4,681 probable deaths.