Post-Covid Manhattan office market rebound gaining momentum

Office workers in Manhattan continue to return to their workplaces in sufficient numbers for many of their employers to maintain or expand their footprint in the city, according to a survey of more than 140 major Manhattan office employers conducted in January by The Partnership for New York City.

The survey found that 52% of Manhattan office workers are currently at their workplace on an average weekday, up from 49% in September 2022. Hybrid working arrangements are still the norm, as just 9% of employees are in the office five days a week, a percentage that is unchanged from September.

The share of office employees that are fully remote, though, dropped from 16% in September 2022 to 10% as of late January. For employers with a hybrid model, the survey reports that 59% of employees are in the office at least three days a week.

While 29% of employers have reduced their real estate footprint since February 2020, 17% increased their footprint, and 54% had no change. A larger share of employers (26%) expect to increase their real estate footprint over the next five years than expect to reduce it (18%); the majority (56%) expect to maintain their current footprint.

About half (48%) of employers expect to increase their New York City workforce, 45% expect to maintain current headcount, and only 7% expect to reduce headcount.

The majority of respondents are in financial services (37%), real estate (17%), law (11%), tech (6%), media (6%), and consulting (4%). The majority of surveyed employers have offices in Midtown West (54%), Midtown East (23%), or the Financial District (15%).

Post-Covid Manhattan office market rebound gaining momentum — The survey asked employers to evaluate the impact of remote work and their new office attendance policy. In most instances, a plurality of companies indicated that remote work had no impact on business outcomes/company dynamics. See the table below for detailed data. Table courtesy The Partnership for New York City.

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The proportion of the U.S. workforce working remotely has dropped considerably since the start of the Covid 19 pandemic, but office vacancy rates continue to rise. Fewer than 26% of households have someone who worked remotely at least one day a week, down sharply from 39% in early 2021, according to the latest Census Bureau Household Pulse Surveys.

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