New York, New York. If you can make it here, you can make it anywhere. Now there is momentum for NYC as it bounces back from being one of the hardest hit of all cities. Many thought it couldn’t recover. As the town reopens and gets its groove back, it’s giving the rest of our country hope that life as we knew it can be back to how we want it.
In this week’s up and down, we look at all the ways NYC is defying the doubters and rising to the reopening challenge. The city is not just surviving. It’s thriving.
Those who live in New York City are ready to move on from quarantine restrictions and local government is finally on board — giving the green light for businesses to operate at 100% capacity, letting the vaccinated lose their masks indoors, and lifting restrictions on curfews.
Here are a few key indicators that NYC is back and on the UP.
- The high stakes race for the next mayor is heating up and Kathryn Garcia is surging in momentum. She’s the one candidate that might actually have what it takes to make New York great again.
- Events and attractions like the Empire State Building Observatory and Coney Island are evolving into experiences enjoyed by even the most jaded locals. And Broadway shows have started selling tickets again. The Excelsior Pass is leading in the way assuring confidence at large events & gatherings.
- For the first time in forever, residential real estate is a buyer’s market. The New Yorkers who fled en masse aren’t just moving back — they’re rethinking where they want to live and are revitalizing new neighborhoods.
- Abandoned skyscrapers are filling back up as companies reopen their office doors and bring employees back to work to experience the intangible benefits of the office that you don’t get through Zoom.
- The pandemic demand for better ventilation spurred a move toward sustainability that is making NYC a safer, cleaner place to be.
Here’s how NYC is hitting on all 5 drivers of momentum…
DISRUPTION: Residential real estate is heating back up — it is a buyers market today. Better buy fast — how long will it last?! New Yorkers are starting to think about Real Estate in NYC from the opposite perspective and it is helping to revitalize unexpected neighborhoods.
- Some other Shark tank investors like Mark Cuban may be diving deep into crypto, Barbara Corcoran plans to “get rich the old fashioned way” by taking it slower through real estate investments. She says that the market has completely flipped in NYC and is in the best shape for buyers.
“Manhattan is in great shape, it depends on what side you’re on. I want to buy. It’s in the best shape ever. I’m getting great deals that are going to go away by the end of the year.” — Barbara Corcoran.
- As many New Yorkers fled the five boroughs between the first quarter of 2020 and the first quarter of 2021, median asking rents across the city decreased 14%, to $2,400. Median home sale prices, meanwhile, fell 9%, to $675,000 during that same time, according to StreetEasy.
Now New Yorkers are exploring new districts in the city
- The number of households moving into NYC is expected to exceed departing households for the first time since January 2019.
- Rather than escaping the city, many New Yorkers are just moving a few miles away. New neighborhoods are starting to blossom as they trade in small apartments close to city offices for larger homes and green space in neighborhoods like Windsor Terrace in Brooklyn, Mott Haven in the Bronx, and Howard Beach in Queens.
- Mott Haven is leading a revival of the South Bronx. They experienced dramatic growth resulting from increased private and public sector investment.
INNOVATION: New Yorkers have a renewed appreciation for the attractions in NYC that were traditionally considered “tourist attractions”.
- The Empire State Building Observatory: There is no greater symbol of resilience and reopening than the Empire State Building. It was one of the first public attractions to reopen after last year’s COVID shutdown: on July 20, 2020. It has also been subject to $165 million worth of upgrades — now including a revamped 102nd-floor observation deck, a glass elevator, new museum space, and a new dedicated entrance. And to mark its 90th anniversary, the Empire State Building is kicking off a variety of new offerings, including the new 90 in 90 Tour and VIP experience which will take guests on a 90-year journey in 90 minutes as they explore the building’s rich history.
- Hudson Yards: Hudson Yards is most well known for its attractions including The Vessel and The Edge. Partnerships with Equinox Hudson Yards for morning “sky high” yoga classes on the Edge and the new Farmer’s Market are making Hudson Yards a neighborhood for New Yorkers, not just out of towners.
- Little Island: The highly-anticipated $265M park project called Little Island has just opened for the first time. The floating park off of the West Side Highway was designed by Thomas Heatherwick, who was also behind the Hudson yards Vessel structure. The park features a huge amphitheater for outdoor concerts and shows and unbeatable views for New Yorkers to experience the city from a new perspective.
- Coney Island: After being closed for a year, both Coney Island amusement parks (Luna Park and Deno’s Wonder Wheel Amusement Park) have reopened. Local spots in the area have already seen an impact from an increase in visitors, like Coney Island Brewery.
“Just seeing the rides open almost brought tears to my eyes. Like you can see the Thunderbolt is right behind us and we hear it come by and the screams of people. That’s what gives us energy here” says Victoria Pitula, assistant general manager of Coney Island Brewery.
POLARIZATION: Companies are eager to bring employees back to the office to provide them the intangible benefits of working from an office that employees can’t get from Zoom. It is also important for NYC’s economic recovery. On the flip side, some companies feel reservations about signing long-term (10+ year-long) office leases.
The solution? Shorter-term office leases, for as little as two or three years rather than the traditional 10–20 year leases.
- There was initial “panic” about New York’s future but effective office rents fell only by 2.4% in 2020 — much less severe than the estimated 8.6% decline. Real estate companies have taken a creative approach to the decline. They’ve offered shorter term leases and suggested turning empty office spaces into affordable housing.
- In an August 2020 KPMG survey, 69% of CEOs said they planned on downsizing their office space. By March 2021 only 17% said they’ll be downsizing. Even Tech companies like Facebook and Amazon that led the remote work revolution at the start of the pandemic have made investments in physical offices.
- Less than 16% of workers in the New York metropolitan area were back at their desks as of April 21, 2021 according to data from Kastle Systems. But a survey by the Partnership for New York City shows that nearly half of Manhattan’s office workers are expected back in the office by September.
STICKINESS: Democratic Mayoral Candidate Kathryn Garcia is distinguishing herself with her confidence in her operational experience. Hat tip, Ed Koch 1977: “After 8 years of charisma and 4 years of the clubhouse, why not try competence.”
- All of the candidates in the June 22 Democratic primary are concerned with the welfare of their city and have ideas about how to better it. It is Kathryn Garcia who best understands how to get New York back on its feet and has the temperament and the experience to do so.
- Kathryn Garcia would be the first woman to hold the office and is the only candidate in the race with hands-on housing management experience. She served as the interim Chair of NYC Housing Authority — the largest public housing authority in the country.
- Kathryn Garcia is differentiating herself with her unique focus on housing — Rather than fixating on units, she will focus on reducing the number of people who are sleeping on the street, who are rent burdened, and who are in shelters.
Is Kathryn Garcia’s Momentum surge enough to win the Democratic nomination for the mayor of New York City? We all know NYC mayoral races come down to who has momentum on Election Day.
Kathryn Gracia’s recent surge in momentum could make her the winning candidate on Primary Day if she keeps it going — with a new ranked choice voting system in place for the first time, it could be the force that puts her over the top. Can Garcia keep her momentum rising? Her MFactor surged from 1 to 16 in just 1 month!
SOCIAL IMPACT: A pandemic pause led to commercial real estate leaning into sustainability.
In January, the Empire State Realty Trust (ESRT), which owns the skyscraper and 13 other office buildings in the city, became the nation’s largest real estate user of fully renewable energy. ESRT signed multi-year wind power contracts with Green Mountain Energy and Direct Energy expected to provide 300 million kilowatt-hours of electricity across 10 million square feet of New York real estate — enough to light every home in New York State for a month.
Solar is on the rise in New York City, not only because sustainability has become a requirement for new buildings but also because residential real estate investors recognize that embracing sustainability can increase cost savings and improve experiences.