Diving into the NYC Office Recovery

The retail and domestic tourism sectors are slowly seeing year-over-two-years visit gaps close in New York City, but major office towers are still seeing huge visit gaps when compared to 2019. And this has significant effects on restaurants and retail within the city. So we dove into the data to find out – how far along is the office recovery in NYC? 

Recent Retail and Tourism Recovery 

Domestic tourism visits (visits by individuals living more than 50 miles outside of New York City) fell dramatically over the pandemic. As late as March, domestic tourism to NYC was down -78.1% compared to March 2019, and was still down -16.9% in July. But in August, New York City actually surpassed its August 2019 domestic tourism visits by 2.1%. It looks like the city is recovering some of its mojo after a particularly difficult pandemic. Admittedly, domestic tourism has an advantage when international tourism is restricted, but the growth is still a positive sign for the city. 

The retail year-over-two-year visit gap has also been consistently shrinking. In August city-wide retail visits were only -5.3% down compared to August 2019, despite the resurgence in consumer concerns over COVID. Whether the rise in retail visits is due to the return of tourists or to locals feeling more confident about the future, the rise in foot traffic shows that the city is on the road to recovery. 

Office Buildings Still Half Empty 

But despite the positive trends in retail and tourism performance, the NYC office recovery is still presenting a key obstacle to a fuller rebound.

According to an index of over forty major office towers in New York City, monthly visits were still -51.0% lower in July of this year than they were in July 2019. And although the year-over-two-year visit gap had been consistently narrowing, the visit gap grew again in August. The combination of work from home, rising COVID cases and the summer’s standard obvious office impact stalled the growth being seen in the sector.

August Downturn 

The August downturn is also reflected in the month-over-month foot traffic change. After five months of month-over-month visit growth, office tower foot traffic dropped sharply in August, with visits -13.3% lower than they were in July. Of course, August is also a month where many workers – especially for New York City office workers – traditionally take some vacation time, and the month-over-month drop may be due to standard season fluctuations. And some workers are likely put off by rising COVID cases. 

Yet, the relative stability in the visit gap, even during a difficult August month that had the added challenge of rising COVID cases could indicate a levelling off of the office decline.

Will the year-over-two-years visit gap to NYC office towers narrow by the end of 2021? Will month-over-month office visits rise again in September?

Visit Placer.ai to find out.