Empire State Realty Trust plans to reopen its offices Monday. The check-in desk at 1350 Broadway, an office building it owns.
Photo: Empire State Realty TrustNew York City will allow companies to reopen their offices on Monday after a three-month lockdown from the pandemic. Few employees seem ready or willing to go back.
Most companies are taking a cautious approach. Some are keeping offices closed, while others are opening them at reduced occupancy and allowing employees to decide if they prefer to keep working from home. Mary Ann Tighe, chief executive for the tri-state region at real-estate services firm CBRE Group Inc., said many New York City clients don’t plan on being fully back in the office before Labor Day. And maybe only then if schools have reopened.
Companies are worried about another wave of infections, Ms. Tighe said. Some are also concerned about commuting bottlenecks, if more drivers lead to traffic jams or public transit limits the number of riders. Lower maximum occupancy in elevators could also lead to lines.
New York real-estate brokers and landlords say they anticipate only 10% to 20% of Manhattan’s office workers will return on Monday, though they expect that figure to increase gradually over the summer. Traders at financial-services companies are eager to return, these people say, but most of their other employees are staying away. Tech and creative companies are also taking their time.
A notable exception are real-estate firms, many employees of which will return in force this week. That includes RFR, which is located in the Seagram Building on Park Avenue and is encouraging its 60 employees to work from the office four days a week. About half of Brookfield’s roughly 700 New York employees will be allowed to return to their office on Monday, and the company expects about a quarter of the total to show up.
“We felt it was really important, as the largest office landlord in the world, that we demonstrate leadership in returning to the office,” said Brian Kingston, chief executive of Brookfield Property Partners.
Real-estate firm employees are among those more eager to return to their offices. Surfaces at 1350 Broadway get cleaned.
Photo: Empire State Realty TrustThe widespread reluctance to return to the office means it could take New York City’s economy even longer to recover from the shock of the pandemic and the business shutdowns that followed. Landlords continue to collect rent even while buildings are mostly empty. But the shops, restaurants and bars clustered on Midtown streets that depend on office workers are unlikely to fill up anytime soon.
New York City stands to lose 475,000 jobs over a 12-month period starting in the second quarter, the New York City Independent Budget Office estimated in April. It projects sales-tax revenue will drop 36.4% in 2021 compared with its pre-pandemic projection.
Some companies say they owe it to their city to go back to the office. New York’s economy is based on population density, said Michael Phillips, president of landlord Jamestown LP. “That human social contract relies on everybody showing up,” he said, adding that he estimates Jamestown’s employees will start returning to the Manhattan office in July.
Other states have also shown little enthusiasm for returning to the office. In Georgia, which began reopening in April, visits to office buildings were still at just 72% of pre-pandemic levels in mid-June, up from a low of 61% in early April, according to Openpath Security Inc., a maker of keyless access control systems.
New York state guidelines call on companies to limit occupancy, keep 6 feet between workers and to use masks in common areas, among other measures, and most buildings are following suit. Many landlords are also asking office workers to check into an app every day and answer health questions or take their temperature. Thermal cameras are now installed in lobbies across Manhattan.
But many firms say having employees work from home has been better than expected and are in no rush to get back to the office. In a recent global survey by trade group CoreNet Global, just 15% of companies said their office occupancy will be back to pre-pandemic levels within six months and 38% said it would take more than a year for everyone to be back.
Twitter Inc., which last month told employees they can work from home indefinitely, said it won’t reopen its New York office on Monday. Ad giant Interpublic Group of Cos ., whose agencies employ nearly 10,000 people in New York City, has told its employees they would continue to work from home until at least Labor Day. Omnicom Group Inc. said it would wait between two and four weeks to begin the return to work. Even then, employees won’t be required to return to the office if they aren’t comfortable, said a spokeswoman for the ad giant.
The financial sector is moving a bit faster. Banks were deemed an essential service by New York authorities and were allowed to keep their offices open during the shutdown. These firms found the work-from-home transition was challenging for traders, especially early on in the pandemic when markets were melting down, since the trading-floor environment is hard to replicate in a home office.
JPMorgan Chase & Co. expects about half of its trading staff to be back at its Manhattan headquarters by the middle of July, though it isn’t requiring anyone to return yet.
Goldman Sachs Group Inc. Chief Executive David Solomon has been in the office for most of the shutdown and has said he is eager for employees to join him there. Still, the bank is bringing back only about 10% of its staff this week. Managers have been told not to require anyone to come back and to instead seek volunteers.
Morgan Stanley, whose CEO recovered from Covid-19 earlier this year, has less than 10% of employees working in offices nationwide and will start layering in additional employees, focusing on traders, after the July 4 holiday.
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Citigroup Inc. expects about 5% of its staff to start returning to its New York offices on July 1. Volunteers from trading desks and other groups that are less able to work from home efficiently will be in the first batch.
Employees will be shown videos that explain the new rules of the office, including how to enter the building and use the bathrooms. Desks are separated by plexiglass, and there are fewer chairs in the conference rooms.
More employees will follow as the bank fine-tunes the procedures and office environment and tracks any sickness. CEO Michael Corbat has said he is a believer in office culture. Citigroup pre-pandemic had knocked down walls in its offices to encourage collaboration and chance meetings, what Mr. Corbat calls “constructive collision.”
Real-estate firms, which have maintained that working from home is no substitute for face-to-face interaction in the office, are among the more eager to return to their desks. Empire State Realty Trust, the owner of the Empire State Building, plans to reopen its offices Monday and expects about a third of its employees to return within a week, according to Chief Executive Anthony Malkin.
Silverstein Properties’ employees will be free to return on Monday but will be divided into three groups. Each group gets two days when they can come into the office, followed by four days when they are required to work remotely, said the company’s chief operating officer, Dino Fusco. Silverstein installed plexiglass shields at its check-in desks and is placing antimicrobial film on surfaces in common areas that get touched a lot, such as doors and turnstiles, Mr. Fusco said.
—David Benoit, Liz Hoffman and Suzanne Vranica contributed to this article.
Write to Konrad Putzier at konrad.putzier@wsj.com
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