OUR skyscraper of the 47 floors where Deutsche Bank offices were located NY left from 2021 creepy empty, at least for a building in the center of development and in the heart of the Big Apple.

He is one of an unprecedented amount of unused business space in NYC. This year, the number of vacancies reached a record 22.7%, and experts predict that this figure will not fall below 19% until at least 2026.

While New York City is showing signs of recovery from the pandemic, with housing rents rising, tourism returning and workers returning to their jobs for life, offices, especially in Lower Manhattan, don’t seem to be following the same trend..

Asking rent for office space is likely to hit its lowest level in a decade, according to the latest forecasts. The average rent for an office in Manhattan was $75.13/sqm in April 202350 minutes cheaper than in 2022.

Unintended Consequences

It’s about disturbing event, at least for municipal officials, who in the past decade have depended on an ever-growing real estate sector whose taxes provide liquidity for municipal police and garbage collection.

Property taxes account for about 20% of the city’s total tax revenue, with office buildings in particular accounting for 10%. And as those revenues decline, city spending continues to “grow,” which recommends challenge the agenda of Mayor Eric Adams.

In order to balance the budget, the municipality has asked municipal services to cut costs by leaving vacancies to fill or reducing services.

The independent body’s assessments are identical to those of the municipal authorities regarding slow growth of both tax revenues (including taxes on the use of commercial real estate) as well as total income.

Asked what plans are in place to rescue the New York commercial real estate market, Mayor Adams repeatedly stressed that both at the city and state levels it is necessary to facilitate the possibility of converting offices into residential premises.

Source: Bloomberg.