New York, New York: We’ll Make a Brand New Start of It!

When “Start Spreading the News” hits the airwaves, true New Yorkers feel an immediate sense of pride that words cannot explain. New York City is recognized as the mecca of the world for business, entertainment and luxury living. There is no greater city in the free world.

As great as it is, however, the city is not immune from devastating events, which are often felt with great impact. That’s why the COVID-19 virus has virtually shut down the city that never sleeps. Since March 2020, NYC has become a ghost town. An empty Times Square is just one of many images that reflect how dramatically the city has been affected.

The city has been knocked down before and it will get back on its feet. The question on everyone’s mind is when that will happen. Since the lockdown began last March, a mass exodus out of the city has taken place at levels far greater than those seen following the tragedies of September 11, 2001. Retail shops, restaurants, bars, museums and parks emptied almost overnight.

Given the current state of affairs, it’s not surprising that the situation is hitting the real estate market very hard. No one knows exactly what the long-term effects will be, but everyone agrees there will be changes. How drastic is yet to be determined, and how quickly the real estate market bounces back is still to be seen.

But given New York’s history and resilience, all agree that the city will bounce back.

The economy will begin to improve when individuals and companies feel comfortable that people can walk the streets safely.

Two major factors are, first, the coronavirus and vaccine and, second, public safety.

Vacancies currently are up at alarming rates as businesses have moved to operate remotely. However, this trend eventually will subside, and as it does, opportunity will present itself. As vacancies increase, rent prices will decrease. Those who were unable to afford space before the pandemic may now be able find a place in the Big Apple to call home. This goes for both residential and commercial real estate.

Businesses will be forced to take a hard look at how they operate within the city, which will determine where the commercial real estate market heads. They most likely will revamp their long-term needs for office space, given the ability to succeed with their workforce working remotely.

For those forced to leave before the pandemic, reduced space needs may open up opportunities to return and re-establish footprints in the city. Technology companies have already been active in taking on more space.

The most optimistic forecasts have suggested a revival in the latter half of 2021. With the return of employees, the need for restaurants, entertainment and shopping will grow. As tourists return, the hospitality industry will revive as well. Eventually, this activity will give rise to all that was NYC once again.

Residential real estate is likely to follow a similar path. There is so much development happening now in the city that the inventory will only rise in the short term. Lower pricing and rents resulting from the pandemic exodus will enable a wider range of individuals to find their place in a greater number of economic ranges. As residents return, commercial and retail spaces will flourish as well. The timing in the most optimistic forecast is the latter half of the year, but the long-term outlook is positive.

Having lived and worked in New York City for most of my life, I have seen how New Yorkers persevered after both 9-11 and the financial crisis. My office was relocated and I had to make decisions in order to continue in challenging situations. But I survived and came out better on the other side.

Although after 9-11 I was able to return to our offices as they were, I had to be more vigilant about my surrounding. That mindset is will get us through this pandemic. Most of us will return to our offices. We will continue to rent or buy apartments. Restaurants, theaters and parks will once again draw crowds.

How long will this recovery take before we can all do the things we cherish and how long will the businesses, real estate developers and renters/homeowners have to ride this out? All will be monitoring this very closely, but one thing is for sure: “It’s up to you, New York, New York!”

Charlie Anastasia has joined Weaver’s Real Estate team and will be working to expand the firm’s presence in the city he loves. For information about Weaver’s real estate services, visit https://weaver.com/industries/real-estate.

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