The economic turmoil from COVID-19 continues to roil commercial real estate in New York City and the country. Industry and company leaders uniformly agree the redefinition of how we use office space will take time. There are, however, signs of our collective focus slowly evolving from initial reaction and evaluation of the wreckage to “ok, what does returning to the office look like?”. Case in point: we've all heard the term "6 feet office" by now, right?
Some notable early-ish developments have occurred in NYC with big tech companies like Google, Facebook, Twitter, and TikTok, among others.
We’ve seen some indications on how the tech heavyweights will approach work-from-home policies and leasing office space, including an announcement of a big Manhattan office lease in midtown.
Google’s Chelsea space
Google and its alleged frenemy Facebook have extended work-from-home flexibility for their teams. Google has stated the policy is an option for their people through the end of 2020 and some expect that the search boss will find ways to extend and make permanent their flexibility.
Since their opportunistic purchase of a 2.8 million square foot space in Chelsea in 2011 during the wake of the last financial crisis, Google’s footprint in New York has grown and grown with over 7,000 employees. They’re a critical part of the tech ecosystem in the city, and their approach to office space and flexible work from home arrangements will help shape tech in NY’s collective response.
Facebook adds Hudson Yards
Facebook, like Google, was an early mover in extending flexibility for its teams to work remotely. The social giant’s New York footprint includes its big tent pole office near Astor Place in Manhattan, outposts on Park Avenue South and in NoHo, and its newly-inked office space in Hudson Yards.
Facebook has acknowledged they will tether positive performance and reviews to allowing current team members to apply for permission to work from home permanently. They've also extended more flexibility to senior engineers to work from home from the start of their employment. It will be interesting to monitor how these policies affect the social giant's commercial real estate footprint in New York.
Twitter nods toward WFH
Jack Dorsey has, perhaps, taken his company further than both Google and Facebook on their approach to the work from home future to which we've already arrived. He told employees in mid-May that many of them would be allowed to work remotely on a permanent basis. Knowledge work environments have historically been a haven for innovation in space and design. So if this policy is pushed company-wide, a trail blazer it would be.
Alas, Twitter's Manhattan space isn't gone or new, for that matter. But, the company may have been ahead of the curve in at least two respects. According to this Business Insider tour in 2017, Twitter's Chelsea office on 17th Street has rose on tap, and a #BlackLivesMatter inspired mural on its "Wall for a Cause".
TikTok takes Midtown
Perhaps the most surprising and optimistic development came from the new kid on the block: tech behemoth TikTok. The video-sharing app has grown at hyper clips during the quarantine.
TikTok signed a Manhattan office lease for over 230,000 square feet of space in Times Square. This signing occurred amid asking rents softening across the country as the economy reels. Companies from coast to coast are evaluating their tenant rights and seeking potential wiggle room for their real estate commitments as a matter of urgency and necessity. In this environment, TikTok's lease makes a splash that exudes optimism.
The tech giants in NY have gigantic commercial and office space commitments. Perhaps the TikTok lease is a watershed moment for those seeking and selling office space for lease in NYC. Despite the collective initial nod toward flexibility, both the tech ecosystem and commercial real estate pros in New York will have to wait to see if remote work is a temporary remedy or the brave new future of how big tech organizes its teams.