[NYguy]

https://commercialobserver.com/2020/...ny-new-office/

Yes, Everyone Still Wants That Shiny New Office

BY STEVE CUOZZO
MAY 27, 2020

... Six million square feet of expensive, newly-minted and as-yet unleased office space coming to market in the midst of one of New York City’s most catastrophic times might sound like too big a pill to swallow.

But things have looked bleak before, and it’s time to give the city’s remarkable regenerative powers a fair shot.

Usually baseless fears of a “glut” and “shadow space” – i.e., occupied floors that are quietly up for sublease – are a forever part of New York real estate chatter. Even when they occur, as in the late 1980s due to undisciplined over-construction, they don’t last long.

Nor do physical catastrophes produce the dystopian “things will never be the same” outcomes. It was an article of faith for some that Manhattan, and downtown especially, wouldn’t ever be the same after 9/11. Who would ever again want to work there, close to an open mass grave and amidst possibly poisonous air? But downtown became the city’s lowest-vacancy office district a few years later.

Ah, skeptics say – but 9/11 was a one-time disaster, where the virus might be with us for years.

Counterpoint: New York City lived in dread of another terrorist attack for long after. We feared another airborne assault at least as much as we now fear the airborne virus.

Also in the largest new projects’ favor is that companies needing the most state-of-the-art workspaces won’t have much choice elsewhere. Manhattan is almost out of buildable footprints on commercially-zoned land big enough to allow super-size new developments to go up – which is one reason why, for example, ABC/Disney is building a new headquarters in the once-unappealing Hudson Square.

Even the 4.3 million availability figure “needs an asterisk,” said JLL tristate chairman Peter Riguardi, because some tenants that signed for the supertalls have expansion options beyond their original commitments.

Ever-optimistic Mitchell L. Moss, Henry Hart Rice Professor of Urban Policy and Planning at NYU, acknowledged, “Everything will slow down because of the uncertainty.”

Even so, brand-new towers that incorporate today’s in-demand bells-and-whistles – such as column-free floor plates, 14-plus-foot slab to slab floor heights, and environmentally attuned infrastructure – have a huge advantage over the city’s older office stock. Buildings a mere 25 years old are generations behind the new class.

Moss noted, “Buildings like One Vanderbilt are sufficiently advanced that they can be easily modified to protect employees before they open.”

Tighe said, “The Covid crisis is going to cause anybody who’s looking at their office needs to factor in elements ideally suited to new buildings but are challenges for older ones.”

The sophisticated air-flow systems shared by the new skyscrapers can be made virus-resilient much more easier than older ones can. And, “it’s easier to create touchless technology in new buildings,” Tighe said. “UV lights can kill off germs in buildings during the day. The entire process of access will be touchless,” thanks to iPhone codes that can let employees in without having to pass through security gates.

If anything, reduced demand for office space will hurt Class-B buildings and older Class-A buildings more than the new, ground-up crop. That trend has been ongoing for years as tens of millions of obsolescent commercial properties were converted to apartments.

It’s part of the city’s ever-evolving dynamic, which not even the most terrible plague in 100 years is likely to change.