NYC Office Market
It seems like every other article on the Real Deal lately has been about impaired office loans or trouble ahead in the NYC office market. I am just curious what the pulse is like for some other real estate professionals active in this space? How concerned are you/your firms, if at all? And, are you seeing any strategies implemented to mitigate risk?
Its the most talked about asset class with the least amount of clarity. Pretty much the big office REITs are:
I still believe the big catalyst for office is going to be if the GSA makes the welfare queens go back into the office or not
Objectively speaking, I believe the GSA is the biggest lessee of office space in America. Considering a lot of their space is in expensive core markets like DC, it would make absolute sense for them to downsize/terminate/not renew many of their leases. I wouldn’t say go 100% remote but people are always talking slashing government spending, this is one easy way to do it.
Only drawback to that idea is I also realize that many govt employees are lazy, unmotivated individuals even when they were in office. If you give them the ability to WFH, productivity can get real bad for them. It’s not like in the private markets where we are incentivized to still produce from home because of our compensation package.
Also, I’d imagine the large office owners would cry in perpetuity and lobby against the GSA choosing to downsize/not renew leases.
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