Office Tenants In New York Returning Slowly But Steadily
USA – Marc Holliday, the Chief Executive Of New York’s largest landlord SL Green, revealed that occupants are coming back to the office slowly but steadily, reported The Motley Fool on Tuesday evening (9 November, SGT).
He said this during his latest earnings conference call. During prior calls, he said tenants have cited deadlines to return to their workplaces, like in Labour Day and 1 January 2022, but these were pushed back.
The real estate investment trust (REIT) also insists that it’s seeing no proof that businesses are reducing their office footprint due to the prevalence of working from home (WFH). On the contrary, it said the COVID-19 pandemic has prompted companies to add more personal space in office floorplans.
It also argued that despite the ubiquity of hybrid working arrangement, in which staff alternates from the office and at home, employees still require a desk and a workstation.
Notably, SL Green owns 30 million sq ft of office space, retail, and residential assets in the Big Apple. In particular, tech firms are its largest occupants, accounting for about 33 percent of its tenant base, followed by financial institutions (30 percent) and law firms (11 percent).
Although it appears that Manhattan is returning to its prior state before the pandemic struck, SL Green’s overall occupancy rate dipped from 93.6 percent to 93.1 percent in Q3 2021.
Nonetheless, the REIT indicated that it targets to lease an additional 1 million sq ft to 1.5 million sq ft of commercial space for the whole of 2021. This is aside from the 29.5 million sq ft of commercial footprint that was occupied during the start of the year.
In particular, SL Green’s tenants have struck 10-year leases. This suggests that its occupants believe that they will need an ample amount of commercial space for the foreseeable future. Furthermore, Holliday disclosed that chief executives of its occupants believe having an on-site workforce gives them a competitive edge over rivals.