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In the depths of 2020’s crisis, roughly 19 percent of Manhattan’s office space—about 47.4 million square feet—stood empty.
More millions of retail space went vacant as restaurants were shut down and shops that depended on commuters and tourists went dark.
Things are not significantly better now.
The Delta virus has kept away the customers that retail businesses were hoping would return, while less than a quarter of the island’s office workers have returned, according to Kastle Systems, as we reported in “Return to Offices Postponed: Commercial Real Estate Bust?” (14 Sep 2021).
On 14 September, about 120,500 people rode the Metro North Railroad, the company reported, only 54 percent of the typical daily load the line carried before the COVID crisis.
“We’re still offering restaurant tenants…relief, rent deferrals,” Grant Greenspan, a principal in real estate corporation Kaufman Organization, told CNN Business.
The Bluestone Lane coffee shop chain has five sites inside Manhattan office buildings, which have seen no more than 30 percent of pre-crisis commuters return, CEO Nick Stone estimated.
“I can’t see it getting dramatically better within the next six months,” he said to CNN. “We’ve got a real challenge on our hands.”
TREND FORECAST: The focus of urban economic energy and innovation will continue shifting from its traditional centers, such as New York and Los Angeles, to new hotspots, including Austin, Miami, and Raleigh, N.C.
The accuracy of our forecast, made before the COVID crisis and that we re-emphasized in the article cited above, is being borne out more starkly as time goes by: the urban cores that have been the focus of attention in the past, such as Chicago and San Francisco, will undergo long, slow declines, marked by shuttered storefronts, vacant offices, and sinking property prices, as they struggle to cope with smaller budgets, a reduced quality of life, and more low-income residents.
In addition, as urban centers go down, crime levels will rise. As Gerald Celente notes, “When people lose everything and have nothing left to lose, they lose it.”