[rentpeek]

In NYC, occupancy of office buildings seems to be stabilizing at 30-40% below pre-COVID levels. However, many of the buildings refinanced during the zero rates period from ~'18-'22.

Going to be interesting to see what happens when that debt rolls off and needs to be refinanced.

[somberi]

Some note-worthy points from Crain's coverage (1).

- Compared to 2019, the average New York office worker is spending $4,661 less on meals, shopping and entertainment near their workplace, the researchers found. That dropoff is the highest of any city included in the study, outpacing Los Angeles ($4,200), Washington, D.C. ($4,051), and Atlanta ($3,938), among others.

- New York workers are spending about 33% fewer days in the office now than in 2019, according to the study. That ranks fifth among the studied cities, with Washington seeing the highest in-office decline, at 37%.

- ....Only 9% of employees in their offices five days a week—unchanged from September 2022.

- That amounts to at least $12.4 billion a year in losses for the city

- estimated 2.7 million people who worked in Manhattan in 2019.

(1)https://archive.is/YNjys

[xyzelement]

Yeah I "am worried" about NYC. The decrease in office use maps to decrease in "I have to live here because of work" just as the eroding quality of life is decreasing the "I live here because I want to."

So the trend over time will be that folks left in NYC are increasingly poor with no other options, completely eroding the tax base and sending the city into a spiral. I didn't live here in the 70s but I expected something similar.

In the early 2000s-2010s there was an interesting trend of adults moving to the city and raising kids there vs the burbs. I think that's over and done with, everyone with money and energy seems to be moving to the burbs if not to Florida.

[rentpeek]

Yea the tax loss for the city is really going to be a huge problem. I think something like 30% of the tax base for NYC comes from commercial RE?

Where do they make that up from, income tax? Sales tax?

At what point do high wage earners decide enough is enough and move to Florida or Texas?

Scary possibility for a tax funding death spiral here.

[Kon-Peki]

> At what point do high wage earners decide enough is enough and move to Florida or Texas?

Middle class people probably get a better deal moving to Florida/Texas. High Net Worth Individuals are too rich for it to matter.

But regular old high income people (LOL) are unlikely to save any money moving to Florida/Texas if they are looking to maintain the same lifestyle.

Nice places in those states have become really expensive, and there are all sorts of other costs that people don’t always look at (like insurance, for example). In Florida, especially, you won’t know what your property taxes are until after you buy the house - except that you know that they’ll be much higher than the current taxes.

[ghaff]

I was just talking to someone last night. Their company has apparently figured that they're basically in a post-COVID steady state at this point modulo any incremental hiring they do. So they're basically doing a full worldwide real estate audit to figure out where they need to get to.

[kubota]

Do you mean pre-COVID levels?

[rentpeek]

yes - thanks for the catch

[creato]

I had the understanding that only residential mortgages have fixed rates. Most loans do not have fixed rates, I would have thought that included commercial real estate loans.