"The pandemic is over," President Biden declared in a CBS' "60 Minutes" interview Sunday, in an attempt to optically please Americans just how great his administration is working to restore a sense of normalcy ahead of the midterm elections.
But one segment of the economy has yet to return from the brink: commercial real estate. Even though the pandemic is over in Biden's eyes and quite honestly could've been over a long time ago -- remote and hybrid working has forever scarred commercial real estate that's still in a big fat ugly bubble.
Manhattan has no sense of normalcy, where the Partnership for New York City surveyed 160 major firms only to find that 49% of office workers are back in their cubicles. This was a notable increase from 38% in April. However, due to hybrid work models, only 9% of workers are in the office five days a week.
About 77% of employers maintain a hybrid office schedule to accommodate employee preferences.
Another metric, and perhaps the gold-standard measure of office-occupancy trends, is the card-swipe data provided by Kastle Systems. The NYC office occupancy rate is only 38% and has bounced between 30-40% for much of this year.
The slow return to the office where levels are barely over occupancy rates seen right before the start of the omicron wave last November comes as a slew of companies from Better.com to Ford to Peloton to Carvana to Zillow to Coinbase, among many others, have laid off workers because of the incoming Fed-induced economic downturn. A declining workforce will mean smaller corporate footprints.
Even though big Wall Street firms demanded their employees back in the office after Labor Day, there was no meaningful increase in Kastle card-swipe data trends across NYC.
Meanwhile, public transit in NYC is well below pre-pandemic levels as commuters shun riding the subways, perhaps because violent crime in the metro area is out-of-control.
Maybe there's a more significant trend at play due to the mass exodus of people and companies post-Covid and remote work trends, signifying substantial challenges for the city's economic recovery.
In October 2020, Mark Zandi, the chief economist for Moody's Analytics, said NYC could be in a downturn until 2023.
The pandemic could be over, but NYC's economy is in turmoil.