Manhattan has again validated the so-called flight-to-quality trend of well-resourced employers seeking top-tier properties with desirable amenities. Visit rates among cream-of-the-crop office buildings in the first three weeks of December recovered back to, on average, 99% of the pre-pandemic level.
For the entire month, the office visit rate among the highest-ranking Class A properties averaged 86%, up from 79% in November and 81% in December 2023, according to a study from the Real Estate Board of New York. While the last week of the month dragged down the average, the visit rate in the second week topped the pre-pandemic level, at 102%, with the first and third week each recovering back to 97% of 2019's level, the study found.
The nearly full recovery at prime buildings comes as employers from Amazon to JPMorgan Chase have installed stricter return-to-office mandates. Major office developers including BXP, whose portfolio includes Manhattan’s iconic GM Building, and SL Green Realty, Manhattan’s largest office landlord known for properties such as its One Vanderbilt trophy tower, have said stricter in-office requirements bode well for the sector.
Overall, Manhattan office buildings in December saw an average visitation rate improve to 72% of the 2019 level. Excluding the last week, the rate would have reached 82%, a new recovery peak and 5% higher than the prior peak set in June, the New York board said.
Lower-tier Class A buildings saw visit rates in December climb to an average of 71%, up from 66% a year earlier. Buildings in classes B and C, which are typically in need of upgrades, saw visit rates rise to 69% from 66% a year ago.
“Manhattan office building visitations saw incremental growth for much of 2024, culminating with the strongest results we’ve seen in five years during the first three weeks of December,” the board's vice president of research, Keith DeCoster, said in the study.
It remains to be seen if the stricter in-office mandates at some firms will translate to a sizable pickup in the visit rate, he told CoStar News in an email, adding “only a handful of firms have mandated five days a week.” He called Fridays in the office “the new frontier.”
The study doesn’t track properties not yet completed by 2019, which means the average office visit rate could be even higher, the board previously told CoStar News. For instance, One Vanderbilt, Brookfield’s Two Manhattan West and Tishman Speyer’s Spiral were all built after the pandemic rewrote corporate work habits, and they are among Manhattan’s trophy towers that have attracted top-dollar rental rates.