New data shows an RTO reversal.
In the early days of post-shutdown return-to-office tracking, offices were busier in markets that didn’t rely on mass transit — presumably because people feared catching the coronavirus on trains and buses. But that trend disappeared with the advent of vaccines alongside other forces, including return-to-work orders and corporate relocations.
The picture now shows office activity (as measured by Placer.ai’s cellphone data) has bounced back much more in New York City and Miami than elsewhere.
Office activity in May 2025 versus May 2019 was only down 18 percent in New York and 20 percent in Miami compared with drops of 32 percent in Atlanta, 36 percent in Houston and Dallas, 40 percent in Washington, 45 percent in Boston, 46 percent in Los Angeles, 49 percent in Chicago, 50 percent in Denver and 51 percent in San Francisco.
It’s hard to pin down the reasons for the discrepancies. One might be that ground-floor retail is more prevalent in New York City office buildings than elsewhere, providing a greater incentive and attracting more kinds of visitors than in cities where offices are just offices — or, even worse, isolated office campuses. Remember, Placer.ai captures smartphone activity, as opposed to the card-swipe data collected by Kastle Systems.
Another is the critical mass theory: When a high enough percentage of people start showing up, it creates impetus for others to follow. That critical mass has been reached in New York and Miami, but certainly not in L.A., Chicago and San Francisco.
A third factor is that working from home is more attractive in cities where homes are larger — and is not an enticing proposition where dwellings are small, like in New York. As my colleague Keith Larsen put it:
“Sitting in front of a computer screen in a 400-square-foot studio apartment all day will make anyone want to return to the office. I don’t think college grads from around the world set out to come to NYC for their career only to sit in their apartment ordering DoorDash while on Zoom calls.”
The ease of transportation also plays into people’s decisions of where to go. New York City’s subways — despite the inaccurate notion that they are unsafe, or less safe than they were years ago — have been working pretty well lately, but are rarely jam-packed at rush hour as they were before Covid.
Straphangers (as they have been called since the city’s subway cars had hanging straps for passengers to hold) have found that the modest drop in ridership has meant more space on trains and fewer delays, because it’s easier to board and exit. Also, they can tap a phone or credit card to enter stations now, rather than swipe a MetroCard.
One thing is clear: Congestion pricing, which began in New York City in January, has not hurt office buildings and has probably helped, despite predictions from naysayers — and bearing out support for the policy from the Real Estate Board of New York and other business groups.
What we’re thinking about: When Zohran Mamdani says project reviews “are sometimes weaponized by billionaires to stall projects that benefit working people,” what New York City projects is he referring to? Ulurp has a strict timetable, and lawsuits that challenge city rezonings are typically brought by NIMBYs (as in Gowanus) and progressives (as in Inwood). Could Mamdani be referring to Village Preservation? Send your guess to eengquist@therealdeal.com.
A thing we’ve learned: A provision on page 52 of the Atlantic Yards Master Development Agreement allows Empire State Development “to refrain from exercising any of its rights under this Agreement at any time.” Critics say future agreements should exclude such “right to refrain” clauses, but the state probably appreciates the flexibility — and doesn’t want to be dragged into court by opposition groups when it bends on something.
Elsewhere…
Homes for sale on Staten Island were rare a year ago, but they are much rarer now. In a home ownership-dominated borough of about 490,000 people, only 932 homes were on the market last month, down 35 percent from a year ago, according to the Staten Island Board of Realtors. Homes sold in an average of 70 days (6 percent faster), the median sale price was up 4.5 percent, pending sales were down 28 percent, and new listings fell 30 percent to 385. The main reason for all of this: It’s hard for homeowners to give up a sub-3 percent mortgage to buy another home at 7 percent.
Closing time
Residential: The top residential deal recorded Friday was $13.5 million for 180 East 88th Street, PH46. The new construction unit is 4,000 square feet. Brown Harris Stevens has the listing.
Commercial: The top commercial deal recorded was $5.3 million for 36 West 89th Street. The multifamily triplex is 6,300 square feet. Sotheby’s International Realty’s Michael Sieger and Jonathan Schupak have the listing.
New to the Market: The highest price for a residential property hitting the market was $10.7 million for 118 West 13th Street, Unit 5. The West Village condo unit is 3,500 square feet. Compass’ Leonard Steinberg Team has the listing.
Breaking Ground: The largest new building application filed was for a proposed 76,268-square-foot, 12-story, mixed-use building with 80 dwelling units at 1445 Fulton Street in Brooklyn. Kao Hwa Lee Architects is the applicant of record.
— Joseph Jungermann
