Despite work-from-home worries, Manhattan office real estate is doing just fine

The office I’m writing this column from is mostly empty. So are the offices of many different companies—banks, law firms, media—that I can see from the New York Post’s midtown windows.

But does it point to a dystopian future of abandoned office towers, accompanied by a collapse of the tax base that largely depends on the economic clout of those towers?

No — despite panic over a report showing companies are giving more jobs to the work-from-home crowd than ever before.

“It’s only going to get worse,” Kathryn Wylde, executive director of Partnership for New York City, warned of findings by research firm Emsi Burning Glass. It’s “a major cultural shift and I don’t see a reversal.”

But we are all prisoners of the pandemic moment, just as we are in every moment. When the New Orleans Saints shut out the Tampa Bay Buccaneers on Dec. 19, NFL sages confidently declared that the lowly Saints were headed for the playoffs and Tom Brady and the Bucs were cooked.

It’s time to look beyond end-time predictions and focus on a counterintuitive truth. Despite about 7.4% less space since March 2020 — peanuts compared to forecasts of up to 25% — the Big Apple companies that occupy the most office space are taking up more, not less, as I’ll enumerate below .

The number of employees working in Manhattan offices is still down compared to pre-pandemic numbers. Getty Images

The phenomenon raises obvious questions: Are the people who run these companies all stupid? Don’t they read interviews with WFH-loving executives in the suburbs who, on cue from journalists, say, “I don’t care if I never have to see the LIRR/LIE/New Jersey Turnpike/Metro-North again”?

The Post reported exclusively on the scary survey on Monday. It showed that in December job postings from large companies, home office jobs jumped to 10.6% of all vacancies, or 25,800 out of a total of 243,000.

That’s nearly quadrupling the 4% remote job listings seen in early 2020.

Regardless, 10.6% hardly sounds like a reversal when certain other “experts” are forecasting that up to 75% of workers will be working from home in the future. Data like this and other statistical and anecdotal reports suggest that the city’s office market — the commercial stronghold that generates more tax revenue than Wall Street — is on the verge of collapse.

But as Charlie Chan tended to say, “Objection, please.” The opposing view ignores some companies’ repeated delays in returning to the office.

Businesses are still signing large leases on Manhattan’s skyscrapers, despite the growing number of work-from-home jobs.Getty Images

Despite the doom and gloom, big firms continue to renew huge leases — like the Fried Frank law firm at One New York Plaza downtown and Madison Square Garden Entertainment at 2 Penn Plaza in Midtown. Both re-signed for more than 400,000 square feet each.

Brand-new Manhattan leases signed in 2021 for at least 100,000 square feet included outfits of all stripes: insurance giant Chubb Group at 550 Madison Ave., Turner Construction at The Spiral, law firm Venable at OneFiveFive, pharmaceutical software developer Schrödinger at 1540 Broadway, and liquor maker Suntory at 11 Madison Ave.

In the last two weeks alone, streaming television hardware pioneer Roku inked a quarter million square feet in Five Times Square. That triples its area in New York. Wait — isn’t Roku the kind of company with its young and tech-savvy workforce that you’d expect to send everyone home?

A few days later, Touro College and University occupied 240,000 square feet in Three Times Square. So much for the idea that entire obsolete office towers could be “converted” for educational purposes – in this case, an actual educational institution pays high office market rent to be in an office that is anything but obsolete.

Some of the new leases have been signed at rents in excess of $100 per square foot, the long-standing benchmark for the poshest tenants in the swankiest buildings.

Streaming television hardware pioneer Roku signed a deal for a quarter million square feet in Five Times Square.Getty Images

Meanwhile, overall Manhattan office leasing rose a robust 8.3% in the fourth quarter, unfazed by Omicron. There is still plenty of space, the rents are lower overall – but that is by no means a sinking ship.

Other big deals could be announced soon, possibly including IBM and investment firm Franklin Templeton of One Madison Ave.

Another barometer of trust is in building sales. Not only did the city’s so-called investment sale market return to pre-pandemic levels in 2021 — Manhattan office towers dominated it with 14 sales totaling $3.55 billion, more than half of the market, the residential and industrial real estate.

Sure, the overall value of Manhattan’s buildings has gone down – how could it not in today’s climate? – but no owners have been spotted jumping off their roofs yet.

The pattern of resilience could of course change. Much will depend on how effectively Mayor Eric Adams can tame crime and homelessness, particularly on the subways and at Penn Station. An unexpected new virus strain in the wake of the retiring Omicron could further delay plans for the return to the office.

But assuming no more disasters strike, the city, and Manhattan in particular, will regain its pull for the best and brightest careerists — and the skyline won’t darken anytime soon.