“The office market is the crux of the whole New York City economy. Until office workers come back to the market, restaurants, retail will not revive. Same with mass transit.”
Wall Street is offering to help get New York vaccinated and get life back to normal for workers in the Big Apple.
Over the last 12 months of the Covid pandemic, the city has been brutalized by small business shutdowns, financial firms moving south, increasing homicides and the general ineptitude of Mayor Bill de Blasio. As we have noted here on Zero Hedge, the result has been barren streets and plunging rents.
Now, financial firms – historically not known for helping anyone but themselves – are reaching out and doing what they can to help distribute the Covid-19 vaccine. They are aiming to show the industry it is safe for employees to come back to Manhattan, Bloomberg notes, before there is “little reason left for them to do so”
NYC real estate mogul William Rudin said: “Needles in arms and people back in their seats and offices. We need to get the vaccine out more ubiquitously to every part of the city and get people confident and comfortable, to get them back into the city and back to work.” DJ D-Sol, CEO of Goldman Sachs, agrees. He was among several firms that included Goldman Sachs, JPMorgan, Citigroup and KKR & Co. that offered to help with vaccine distribution and logistics for the city last week.
Meanwhile, Mayor Bill de Blasio is dealing with a shrinking supply of vaccines, which caused him to cancel more than 20,000 appointments for the jab last week.
As of now, it looks as though working from home is going to continue for at least the first half of 2021 for many firms. “As of Jan. 13, the New York area had an office occupancy rate of about 13%,” Bloomberg notes. It was the second lowest figure, behind only San Francisco, among 10 major U.S. cities. Rents have plunged, as we noted, and retail real estate is flooding the market. Commercial and residential property deals in the city were down 46% last year compared to 2019. This resulted in a $1.6 billion loss in tax revenue for the city.
Workers, meanwhile, are in the midst of giving up on expensive apartment leases and are, instead, moving to the suburbs or cheaper areas of the city.
Ruth Colp-Haber, CEO of real estate services firm Wharton Property Advisors said: “The office market is the crux of the whole New York City economy. Until office workers come back to the market, restaurants, retail will not revive. Same with mass transit.”
A consortium of Wall Street leaders were on the verge of suggesting employees come back last September, but those ideas ran head-first into a mounting infection rate as the city approached the winter. By December, the few who had returned to work were starting to thin out once again.
But now, the tone has turned more dire. Firms are offering up their distribution networks, including their retail branches and other real estate they own in the city, to try and help. Wall Street leaders seem to have genuine (and warranted) concern about whether or not New York’s economy could simply collapse if it continues down the path it’s on.
JPMorgan CEO Jamie Dimon – also likely tired of not having an intern bring him coffee every morning – said last week that “hopefully by September” things will be back to normal. He concluded: “You do see people want to go back to work once they feel safe. A vaccine will be a big part of that.”
