June 29, 2020
New reports from Morgan Stanley and Savills predict challenging times for Manhattan’s office sector, due to the COVID-19 pandemic and its aftermath. The Morgan Stanley report says office vacancies could reach 12% by 2024, while Savills sees rents declining to about $62.47 per square foot in a prolonged recession.
“Many assume that when the stay-at-home measures are lifted, there will still be Covid-19 fears that will continue to materially influence behaviors and the economy,” Savills said. “These fears will likely remain until a vaccine or antibody therapy is developed and widely available, which experts currently estimate is at least 12 months away.”
However, Crain’s New York Business quoted leading office owners as questioning Morgan Stanley’s predictions. ““Most employees want to get back to work,” said Bill Rudin, the CEO of Rudin Management. There’s no substitute for the creativity and mentorship that happen in an office environment, he told Crain’s.