Main Content

Property Managers and Commercial Tenants Work Together to Bring Neighborhoods Back:

Corporate office usage in NYC remains among the lowest in the United States. According to Kastle Systems, as of March 31 2022, NYC office occupancy was only 36.9% as companies are continuing to operate remotely. Concern about public safety, especially in the transit system, is the single biggest obstacle to mobilizing the return to work in the city’s office buildings.

The sharp reduction of office workers in NYC has had a devastating impact on surrounding small businesses. In March 2020, Google announced that 12,000 employees at their Chelsea office were to work from home indefinitely. As a result, the small businesses in Chelsea suffered a significant loss of customers buying lunch, going to happy hours, and shopping.

Weber Realty manages 10 buildings with commercial units in the Chelsea neighborhood of Manhattan. Due to the government mandate to shut down non-essential businesses during the outbreak of COVID-19, commercial tenants fell behind in rent at unprecedented rates. Weber Realty collected only 50% of monthly rent from 10 commercial tenants through April to June 2020.

“During these difficult times, relationships are critical. In order to bring our neighborhoods back, property owners and their commercial tenants need to strategically work together in partnership to find solutions.” said Aaron Weber of Weber Realty Management.

Weber Realty has been able to negotiate deals that helped commercial tenants provisionally stay open through deferred rent, yet caught them up as they are now staying current while significantly paying down on those deferrals.

While some corporate offices in NYC have now made full-time work-from-home part of their employment terms, Google workers will be coming to the office about three days a week starting May 1, 2022. Weber Realty hopes this will gradually revitalize the neighborhood and give the surrounding small business the stimulus it needs to get back on track.

Even though office usage remains about a third of pre-pandemic levels, office leasing activity has increased for five consecutive quarters from Q3 2020 through Q4 2021. Some large new leases have come from tech-oriented and financial service companies that can afford new offices that remain partially occupied. Much of the other leasing activity are renewals where tenants received favorable terms to sign extensions. Recent large new leases have come from the tech industry (Facebook, Apple, TikTok) which are increasing their headcounts and can afford new offices that remain partially occupied.

Skip to content