Plans to return to the Manhattan office face ongoing COVID and safety headwinds

The Empire State Building and the New York skyline are seen from the SUMMIT One Vanderbilt observation deck in Midtown Manhattan in New York City, New York, the United States, on October 18, 2021. REUTERS/Eduardo Munoz

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NEW YORK, May 24 (Reuters) – Efforts by financial firms and others to get workers back into Manhattan offices more than two years after the coronavirus pandemic began, advisers say, are meeting ongoing headwinds as commuters continue to worry COVID-19 make as security.

New York lags other major markets in the percentage of employees who work in the office regularly, in part due to high public transit use and COVID concerns, said David Lewis, chief executive of human resources consulting firm OperationsInc, which works with several firms in the financial sector.

Overall, New York City had an office occupancy rate of 38.8% for the week ended May 11, which is below the statewide occupancy rate of 43.4%, according to data from Kastle, which sells office access cards.

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The security of the subway system was the biggest obstacle to getting back to the office. According to a survey by the Partnership for New York City, 94% of respondents said not enough is being done to address the problem.

“Companies need to address public transit anxiety if they are to hope to get people back into the office,” Lewis said.

There have been a number of recent attacks, including a mass shooting at a subway station in Sunset Park, Brooklyn, in April and the death of Michelle Go, a 40-year-old woman who died in January after being pushed in front of one was approaching train at Times Square station. On Sunday, Daniel Enriquez, who had worked for Goldman Sachs (GS.N) Global Investment Research since 2013, was killed during an apparently random attack on a Q train bound for Manhattan.

About 80% of Manhattan office workers relied on the subway to get to work prior to the start of the coronavirus pandemic, said Kathryn Wylde, executive director of the nonprofit partnership for New York City.

“The rise in crime on the subway over the past two years has clearly discouraged people about their safety and whether it’s an excuse or the reality, people are less willing to return to the office when the crime situation on the subway has not been addressed.” She said.

The number of criminal charges in the subway system rose 24.7% year over year to a total of 389 in April, according to data from the New York City Police Department. Overall, however, criminal charges on the subway system fell by 15% in 2021 compared to pre-pandemic levels in 2019, despite a significant drop in ridership over the period.

Rising public safety concerns could prompt more companies to pay for cabs or private shuttles for employees, said Melissa Swift, US transformation manager at Mercer. “It used to not be an employer’s job to get you into the office, but one consequence of the COVID time is that once work and life are mixed together, you can’t just separate them again,” she said.

Mayor Eric Adams, a former police captain who took office in January, increased the number of officers in the transit office to 3,500, surpassing the 3,250 officers deployed to the system by his predecessor last summer. Adams said he will temporarily double that number after the Sunset Park shooting. Continue reading

Concerns about public transportation safety are likely to increase existing pressure on the New York office market, said Scott Crowe of Philadelphia real estate investment firm CenterSquare Investment Management, who expects market values ​​for Manhattan office buildings to fall 10%. or more.

“Employers are under tremendous pressure from workers to offer the greatest possible flexibility in terms of work location,” he said. “If there are issues with safety now, that’s another headwind for employers trying to get people back to work.”

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reporting by David Randall; Edited by Megan Davies and Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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