May 7, 2023
Average visitation rates in Manhattan offices remain above 60% of the 2019 pre-pandemic peak
Visitation rates have plateaued in recent months
New York, NY – The Real Estate Board of New York (REBNY) today released analysis of Q1 2023 Placer.ai location data in 250 Manhattan office buildings representing approximately 180 million square feet. The report, the first in what will become a regular quarterly report from REBNY, highlights a year-over-year increase in building visitations, while also finding that visitation rates have remained relatively stable for the last several quarters. Of note, the report also found a widening gap between activity in prime Class A properties compared to other property classes.
This report comes at a time of significant demand from real estate industry participants and policymakers for data that can help identify the health of New York City’s office sector. In light of recent challenges in the banking system and discussions about the future of the City’s central business districts, the data in this report sheds light on the performance of the various segments of the Manhattan office market. Given that office buildings account for about 20% of the City’s property tax collection in any given year, a nuanced understanding of building visitation and performance is also critical to the City’s finances moving forward.
Key findings from REBNY’s analysis of Placer.ai mobile device data from Manhattan office buildings in Q1 2023 indicates:
Average building visitation rates were 61% of the pre-pandemic baseline, a significant increase from 51% during Q1 2022. However, visitation rates have essentially plateaued since reaching a peak of 65% in mid-2022
Visitation rates in nearly 60% of buildings exceeded 50% of pre-pandemic baselines.
The highest quality Class A+ properties outperformed Class B by more than 10 percentage points
Midtown posted an increase in visitation rates of 14 percentage points from Q1 2022, surpassing year-on-year gains of 6 percentage points in Downtown and 8 percentage points in Midtown South
Read the full analysis here.
“A healthy office market is critical to the future of New York City’s economy given the vital role that these buildings play in our central business districts and to the City’s finances,” said Keith DeCoster, Director of Market Data and Policy at the Real Estate Board of New York. “The data provided in this report illuminates how different segments of the market are performing, which is vital to understanding the policy responses that are needed to further New York’s economic recovery. We look forward to continuing to provide timely insightful data that can help the public and private sectors work together to make smart decisions about how to help our city continue to grow.”
Accurately assessing the pace of office building visitations is helpful to understand the city’s overall economic recovery from the pandemic. A ten percent increase in office occupancy could represent a potential return of between 100,000 and 200,000 workers to certain neighborhoods. Some studies have suggested that office workers spend an average of over $6,000 each per year on retail and services such as meals and dry cleaning, sustaining economic activity in submarkets across the city.
The office buildings analyzed in the report represent a diverse sample of office building classes and neighborhoods across New York City’s commercial districts. The combined square footage studied in this report represents roughly one-third of Manhattan's office stock.
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ABOUT THE REAL ESTATE BOARD OF NEW YORK
The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association. Founded in 1896, REBNY represents commercial, residential, and institutional property owners, builders, managers, investors, brokers, and salespeople; banks, financial service companies, utilities, attorneys, architects, and contractors; corporations, co-partnerships, and individuals professionally interested in New York City real estate. REBNY conducts research on various civic matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes, and other city, state, and federal legislation. REBNY regularly publishes market data, policy reports, and broker surveys. In addition, REBNY provides for its members: informational, technical, and technological resources; networking and charitable service opportunities; qualifying and continuing education courses; professional education programs, seminars, and designations; career-changing awards; legal advice; and a wide range of additional member benefits. For more information, please visit www.rebny.com.