Tipsheet

Manhattan's Empty Office Spaces Is a Reminder That Economic Catastrophe Awaits

Matt Vespa
Matt Vespa  |  April 11, 2024 6:05 AM

The Biden economy is a house of cards. You know this—it’s the perfect execution of Chinese math. The inflation figures remain high. On MSNBC, Rep. Jim Clyburn (D-SC) tried to blame social media misinformation, only to be interrupted by breaking news that those figures were higher than projected. 

We’re a part-time economy unless you’re an illegal alien—then life is like wine and roses. But the commercial real estate crisis is looming, and Manhattan recently set a record for empty office spaces, which should concern us all (via NY Post): 

Big Apple office buildings have never been so empty. 

While the peak era of remote work may feel long ago in the past, the number of vacant offices in Manhattan just hit a new record. 

The borough’s office availability rate -– or, how much of that market is currently unfilled — hit 18.1% in the first quarter of 2024, the highest rate ever recorded. That’s according to a recent report by investment management company Colliers, Crain’s first reported. 

In contrast, that number, which includes currently empty offices and those that will be empty in the very near future, was just 10% back in March 2020. The majority of the 8% vacancy increase that has occurred since then happened between 2020 and 2022. 

“We are still waiting for demand to catch up and surpass supply,” Colliers Executive Managing Director Franklin Wallach told Crain’s. “It’s still the early innings of 2024, and there are both a fair number of large leases pending and a large number of tenants in the market. But we also anticipate some large blocks of space to be added.” 

Downtown is hurting the most, according to Colliers, with the Financial District the most forsaken of commercial markets. 

As we noted last summer, it’s not just the banks who are on the hook—we have individuals and pension funds that have invested in commercial real estate through what has been dubbed “alternative investment" opportunities. With inflation and interest rates chipping away at the worth of these assets and the possibility of loans being called, our country is barreling toward a situation where a Troubled Asset Relief Program will be needed to stop the bleeding.  

It was already a pain passing that in 2008. I don’t even want to think about the hurdles with this Congress. San Francisco is facing a similar devaluation in its commercial real estate properties. Like New York, it’s experienced strategic foreclosures. One way to avoid a potential collapse is to turn these spaces into apartments, which takes time. It might be too late. This is one of many areas where the economy is shaky. 

No, liberal America, things are not all right.  

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