Manhattan return-to-office plans face persistent headwinds over Covid-19, safety

New York has lagged other major markets in the percentage of employees regularly working in the office. PHOTO: EPA-EFE

NEW YORK (REUTERS) - Efforts by financial firms and others to bring workers back to Manhattan offices more than two years after the start of the coronavirus pandemic face persistent headwinds, consultants said, with commuters still worrying about Covid-19 as well as safety.

New York has lagged other major markets in the percentage of employees regularly working in the office, in part because of high usage rates of public transport and Covid-19 concerns, said Mr David Lewis, chief executive of HR consultant firm OperationsInc, which works with several firms in the financial sector.

Overall, New York City had an office occupancy rate of 38.8 per cent in the week that ended May 11, below the 43.4 per cent occupancy rate nationwide, according to data from Kastle, which sells office access cards.

Subway system safety was the largest obstacle in returning to the office, with 94 per cent of respondents saying that not enough is being done to address the issue, according to a survey by the Partnership for New York City.

"Companies will need to address fears of public transportation if they want to have a hope of getting people to return to the office," said Mr Lewis.

There have been a series of recent attacks, including a mass shooting at a subway station in Sunset Park, Brooklyn, in April and the death of Ms Michelle Go, a 40-year-old woman who died in January after being shoved in front of an approaching train at the Times Square station.

On Sunday (May 22), Mr Daniel Enriquez, who had worked for Goldman Sachs' Global Investment Research since 2013, was killed while on a Manhattan-bound train in an apparently random attack.

Approximately 80 per cent of office workers in Manhattan relied on the subway to get to work before the coronavirus pandemic began, said Ms Kathryn Wylde, chief executive of non-profit Partnership for New York City.

"The uptick in crime on the subway over the last two years has clearly discouraged people about its safety, and whether it is an excuse or reality, people are less willing to return to the office unless the crime situation on the subway is dealt with," she said.

Criminal complaints on the subway system in April were up 24.7 per cent compared with the year before, to a total of 389, according to data from the New York City Police Department.

Overall criminal complaints in the subway system were, however, down 15 per cent in 2021 compared with pre-pandemic levels in 2019, though ridership has fallen significantly over that time.

Rising concerns about public safety may prompt more firms to pay for taxis or private shuttles for employees, said Ms Melissa Swift, US transformation leader at Mercer.

"It didn't used to be an employer's job to get you to the office, but one consequence of the Covid-19 period is that once work and life blended together, you can't just pry them apart again," she said.

Mayor Eric Adams, a former police captain who took office in January, increased the number of police personnel in the Transit Bureau to 3,500, exceeding the 3,250 officers sent to the system last summer in a surge by his predecessor. Mr Adams said he would temporarily double that number following the Sunset Park shooting.

Concerns about the safety of public transport will likely add to the existing pressures on the New York City office market, said Mr Scott Crowe at real estate investment firm CenterSquare Investment Management in Philadelphia, who expects market values for office buildings in Manhattan to fall by 10 per cent or more.

"Employers are under tremendous pressure from employees to offer the most flexibility as possible as it relates to location of work," he said. "If there are now issues around safety, that is another headwind for employers to be trying to get people back to work."

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