How to Bring Back Office Space: One New York Realtor’s Story

Office space inside a building in New York including desks, computers, and rooms with glass doors.

As the vaccinations continue across the country, so does the return-to-office debate. Do we all keep working from home or return to the office post-pandemic? It’s a slow adjustment.

Apple recently announced their employees are returning to the office three days a week in September, while other companies are hiring more remote employees and continuing without the office. Meanwhile, other employees are quitting instead of returning to the office.

According to a recent remote work survey from PwC, office executives want to return to the office in 2021, estimating roughly 75% of employees will return to the office by July. Only 61% of employees want to return to the office.

In New York, Kenneth and Bradley Fishel of Renaissance Properties, a father and son team, are hopeful to revive the art of office culture.

They’re re-leasing spaces after a sleek renovation to attract new office renters with flexible leases and open design. This plan could very well be the future of office space.

Renaissance are working with Newmark, a tech and innovation firm, to re-lease space across their property at 166 Crosby Street in downtown Manhattan’s NoHo district, with help from a team of architects, designers and contractors.

Building in NYC restored by Renaissance Properties

They first restored the historic building to its original splendor, showcasing its natural materials, while using its large windows across its many floors. They constructed offices in various sizes, with each pre-built office having an airy, open plan loft space.

Among the companies that are renting at 166 Crosby Street are a few PR agencies (The Lede Company and Bevel PR), fashion firms such as Nice Shoes and health companies Galileo and HealthQuarters. The prewar building boasts a $2M renovated lobby with a Joe Coffee, lounge seating and bike storage room.

Lobby at 166 Crosby St. New York, NY

Looking at the commercial real estate landscape right now in New York City, Bradley Fishel, the vice president of Renaissance Properties, expects the city to bounce-back post-pandemic.

An office space located at 166 Crosby St. New York, New York

“People are coming back. I’ve noticed a ton of people in the streets and there’s certainly plenty of traffic,” Fishel said. “The commercial real estate landscape is recovering in-kind. Larger operations are realizing they can offer rotational staffing, meaning some employees come into the office only a few days a week and the rest of the time work from home.”

According to Fisher, it’s changing office culture.

“Some operations are consolidating their footprint into smaller spaces, while others are looking for a break in the rent, which they are getting.”

It’s a different story for Big Tech, however.

“Overall, we have discounted our new leases from pre-shutdown rates around 15% through the worst of the shutdown. These days we are at about a 10% discount to pre-shutdown rates,” he said. “Landlords who were not flexible before certainly are now. I see a roaring 20s beginning in September.”

It isn’t necessarily the death of the office space to both employees and executives.

“Aside from the creative benefits, there are also fewer distractions like kids and pets, as well as fewer technical glitches in simple conversations like the infamous: ‘Sorry, I forgot I was muted,’ or even basic connectivity delays,” Fishel said.

There are benefits to returning to the office. Executives and middle managers want to monitor their staff’s productivity levels, and it’s way easier to check in on employees who are at the office. Some employees don’t mind it that much, either. They often want to drop in to their boss’ office to ask questions or build stronger rapport for future projects.

That’s not all.

“Morale is important for labor retention, and believe it or not, people miss the water-cooler jokes,” said Fishel.

For the new re-leased Renaissance Properties office spaces, a lot of work went into fixing up the space. What’s different is more flexible lease terms.

Fishel is seeing two trends: more hotdesking (where employees don’t have a permanent desk) and a demand for private office space for executives who want to use smaller meeting rooms when conference rooms are being used by larger teams.

While Midtown has traditionally been the largest haven for office space — most recently, empty office space — there has been a shift to seeing more spaces open in downtown Manhattan, like where Renaissance Properties is home to. It’s more than just the touristic attractions and green parks that pulls companies, however.

View from the top of the roof looking down at downtown Manhattan

“As someone who works downtown, I find it easy to see the appeal of these features in comparison to Midtown, which offers great features, but caters to a different, more traditional tenant,” Fishel said.

Going forward, we can expect more than just the roaring 20s in the city. Commercial real estate is bound to see a rebound after a tough year, but mostly for tech companies and startups that are adjusting to post-pandemic demands.

“We saw each business that could not survive the shutdown replaced with one that was either downsizing, expanding or totally new,” Fishel recounted.

Clearly, surviving 2020, which was a lockdown for many states and countries across the world , made us all Zoom-dependent. We learned to shop exclusively online, sparking the e-commerce renaissance that jeopardizes the future of retail. The pandemic accelerated the growth of digital health consultation, pushing health care companies with intuitive apps ahead of the rest.

Among the companies that survived the lockdown, Fishel cited NotCo, a food-tech company that makes plant-based meat alternatives using machine-learning technology, which recently moved into an office space previously rented by a garment user.

It’s a metaphor for the types of companies we can expect to see in the coming year.

“This is the shift I am seeing most of, a focus on technology,” he explained. “Along with the reopening of the city, landlords should be more flexible going forward with their deal terms if they expect to land the best tenants.”

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