Broker confidence in the prospects for New York City real estate rose to record levels, according to a report released by The Real Estate Board of New York, the city’s leading real estate trade association.
This optimism “is driven by increased vaccination rates and the return of domestic tourists and entertainment throughout the city, indicating that a strong recovery is underway,” REBNY President James Whelan said in a prepared statement. He called for building on this momentum “with a focus on further boosting vaccination rates and adopting smart public policies that drive our recovery forward.”
According to REBNY’s latest Quarterly Real Estate Broker Confidence Index, the Current Conditions Index for commercial brokers increased to 20.8 for the second quarter, after spending five consecutive quarters in negative territory. The CCI index still falls short of the record of 34.1 in the first quarter of 2019. The Confidence Index uses a scale of -100 (uniformly negative responses) to 100 (uniformly positive responses).
The commercial sector’s Expectations Index for the second quarter hit a record high of 52.5.
The report notes that data from CBRE indicates a 20 percent increase in overall Manhattan leasing compared to the first quarter: “Midtown, Midtown South and Downtown all experienced an uptick in leasing activity since the previous quarter. … ”
Further, the number of workers returning to their offices on a regular basis has been increasing steadily over the past few weeks, with about 24 percent of New York metro area employees back in the office as of July 28, according to data from Kastle Systems.
“Commercial brokers are keeping a close eye on how quickly companies successfully bring employees back to the office,” with major investment banks, law firms and real estate firms in the lead, REBNY says.
Optimistic, but …
There are also indications, however, that the growing optimism could be fragile.
REBNY points out that, for now, “availability rates remain elevated in core Manhattan office districts,” and in some submarkets, such as Grand Central and Midtown East, this is hampering the retail sector.
The report highlights several concerns among brokers, among them another possible COVID-19 surge. It notes that in early August the city’s health department recorded a rise in confirmed and probable cases of more than 60 percent over the previous week.
Still, compared with the previous year, fewer survey respondents expressed a high level of concern about the pandemic, citing confidence in the vaccines.
To help prepare for a safe return of employees and building service workers to New York’s office buildings, REBNY joined SEIU 32BJ, the Realty Advisory Board on Labor Relations Inc., Local 94 International Union of Operating Engineers and the Building Owners and Managers Association of Greater New York in issuing new comprehensive building safety guidelines.
The full report can be accessed on the REBNY website.