New York City is slowly rebounding from pandemic fallout with physical office occupancy increasing as tenants formulate return-to-office plans, according to Savills.
Office occupancy for the New York metropolitan area was 21.7 percent in June, up from 13.9 percent in March. Renewed interest in re-occupancy has also led to more leasing. Activity reached 4.9 million square feet during the second quarter, up 21.8 percent from the first quarter. This marks the highest quarterly total since the onset of the pandemic. Still, demand volume remains well below a typical pre-pandemic quarter.
Even if the market saw an unlikely return to the five-year quarterly average volume (8.5 million square feet) in the third and fourth quarters of this year, 2021 would still end the year 40 percent below pre-pandemic levels of activity. With new supply continuing to grow and availability edging closer to 20 percent, it is unlikely the market will see a rebalance of supply-demand until late