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Bank of America to bring workers back to office by June 1 -Bloomberg
Bank of America told staff earlier this week that it plans to bring workers back to offices by June 1, including those who are not vaccinated, Bloomberg reported on Tuesday. Staff will return in a series of stages, although workers have already begun returning to offices in some cities, including in New York, according to Bloomberg.
The bank has been encouraging workers to get vaccinated and boosted for months, and previously only allowed vaccinated employees into the office. The bank is now proceeding with its return to office plans because COVID-19 cases are low or falling nationwide, and it will not require staff to get the COVID-19 vaccine or boosters, according to Bloomberg.
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The office availability rate in New York reached 19% in the first quarter, the highest in data going back to 2000, according to a report Wednesday. In the Financial District, more than a quarter of offices were available to rent, compared to just 17% a year ago. That jump was largely due to a pair of large buildings being redeveloped, including the former Deutsche Bank headquarters at 60 Wall St.
Manhattan landlords have been struggling with a glut of office space during the pandemic, as workers are slow to return to their desks and companies re-evaluate their real estate needs. Firms looking for offices have been gravitating to newer buildings, which helped push up average asking rents 1.7% to $77.34 a square foot in the first quarter. Still, landlords are including concessions to get deals, offering abatements and tenant improvement allowances.
The average rent in the Financial District was $57.60 a square foot, compared to $83.70 in Midtown. While the availability rate will continue to climb in the near term, we predict the market could start to recover in 2023.
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A daylong event hosted by the New York Federal Reserve brought together key leaders and thinkers to discuss an equitable economic recovery. Hybrid employees say that the biggest incentive for coming into the office is collaborating with colleagues. As for that clustered return of hybrid workers--it might create higher peaks and a continuation of low troughs in terms of office capacity and transit usage, a possibility that poses a particular challenge for the city’s recovery, planning experts and officials said at the event, since changed patterns would force a rethinking of everything from train schedules to tax rates.
Commercial Conversions are top of mind. Back-of-the-envelope calculations suggest that if 10% of current office stock was no longer needed for workers, it could be turned into 75,000 new homes. That is nearly four times the number of housing units produced in the past decade. Additionally, work from home keeps boosting neighborhoods in outer boroughs and suburbs that a portion of New Yorkers stay in their neighborhoods on more weekdays than they once did has already had an effect on spreading out wealth from its center in Manhattan to neighborhoods across the boroughs and the region.
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Owners Edge Fund Advisors and HSBC secured the new debt for the office portion of the 44-story tower at 1540 Broadway from Apollo Global Management, Michael Dell’s MSD Partners and Monarch Alternative Capital. Edge, run by founders Mark Keller and Gary Siegel, acquired the office floors in the tower along with HSBC Alternative Investments in 2010. The new financing replaces some $427 million remaining from a huge financing package the owners borrowed from German lender DekaBank in 2016.
Pharmaceutical software developer Schrodinger is the largest tenant in the roughly 900,000-square-foot office portion of the building, occupying about 100,000 square feet. Edge and HSBC recently completed $40 million in improvements to the property, including a new 27,000-square-foot amenities center and a cogeneration plant that’s expected to generate 70 percent of the building’s energy on-site. Located at the intersection of Broadway and Seventh Avenue at the corner of West 45th Street, 1540 Broadway was developed by Bruce Eichner for the German media company Bertelsmann in the late 1980s.