Silverstein Properties, which developed the new World Trade Center, has made a deal to sell a 20-story office property on Manhattan’s Fifth Avenue for $105 million. In 2020, the company had refinanced the building for $171 million.

The building is 65 years old and Silverstein has owned it for 45 of those years. Rather than update it, the company is dumping it in large part because accounting firm Citrin Cooperman, its largest tenant, left.

Now Silverstein will concentrate on its so-called “trophy” properties, such as the new World Trade Center, which is 95-percent occupied, the company said. 

Private equity firm Blackstone recently unloaded its 49-percent share of One Liberty Plaza in a deal that valued the building at $1 billion. In 2017 when Blackstone bought in, the value was pegged at $1.5 billion.

RXR Realty, which owns dozens of office properties around the city, has defaulted on the mortgage against its building at 61 Broadway and will give the building to anyone willing to take over the loan.  

The building was valued at $440 million in 2016; the mortgage will sell for half of that, according to JLL, a real estate services firm handling the sale.

Next up: the U.S. Federal Deposit Insurance Corp. will market about $60 billion in New York-related commercial property assets held by Signature Bank when it imploded in mid-March.

The city’s office market “is suffering one of its worst downturns since World War Two because of the weak return to offices and high interest rates,” The Wall Street Journal said.

In this year’s first quarter, $489.5 million worth of the city’s office properties changed hands, the lowest value since 2009, according to data service MSCI Real Assets.

In contrast, first-quarter sales in 2022 totaled about $5 billion, more than 10 times as much.

Property owners and market watchers hope fire-sale prices will attract new buyers.

“When New York gets cheap, people around the world talk about it,” Will Silverman, a managing director of Eastdil Secured, a real estate investment banking firm, told the WSJ.

TREND FORECAST: We are seeing the beginning of office buildings as a major real estate investment.

As we show in “‘We Work Remotely or We Quit,’ Workers Say” in this issue, the days in which office workers flocked to office towers in city centers are gone for good.

Too many newer buildings with better air circulation, better daylight, and a broader range of amenities are available to make older buildings competitive.

As we have predicted, those buildings face a bleak future. Many will be returned to their lenders and sold for whatever they can fetch. Many will be torn down. A few can be repurposed, either by commercial or non profit concerns. Others will be taken by cities for back taxes and refurbished as affordable housing or apartments for homeless people.

While economists and other forecasters failed to see the Office Building Bust coming, we had long predicted the trend and its implications in articles including:


More than half of workers in the financial professions would quit their jobs, or already have, if their bosses demand they spend five days a week in a central office, a Markets Live Pulse survey has found.

A majority prefer to split time between office and home—or other remote locale—and only one in five workers would choose to spend five days a week in their employer’s office space.

About 40 percent of respondents said they already spend at least four days a week in a central office.

The survey was conducted 29 May through 2 June among administrators, economists, investment bankers, portfolio managers, researchers, strategists, traders, and retail investors.

The financial industry has been particularly insistent that workers spend their work time in a central office.

JPMorgan Chase mandated that managing directors do so after CEO James Dimon declared earlier this year that working remotely “doesn’t work” for young staffers or their bosses.

The job market added 339,000 jobs in May, indicating that workers who do quit over the issue may find a new job with relative ease.

“When we look at the overall labor market, and we look at finance, unemployment remains historically low,” Andy Challenger, vice-president of outplacement firm Challenger, Gray & Christmas, said to Bloomberg. 

“There still are job opportunities available and companies are still hiring,” he noted, “so it’s not an awful job market to go out and look in.”

More than two-thirds of banks have implemented policies enshrining employees’ ability to choose where to work or a structured hybrid schedule, a survey by Scoop Technologies found.

​Nudging employees to spend at least three days in the office may garner complaints but probably would not be a “walk-away point,” Scoop CEO Rob Sadow told Bloomberg.

However, pushing workers from three days at HQ to four, bosses would be more likely to face a rebellion, he warned. “Four days a week or more, a lot of people will at least look around and see what their options are.”

“Employees are really nervous to give even a fingernail on flexibility because they think if they give an inch, the employer might keep pulling,” Sadow said in describing Scoop’s survey responses. 

“You might see really strong rhetoric or response on flexibility because [workers]  think it’s not just that they’re going to be asked to come in a day more—it feels like a gateway to being asked to come in full time,” he added.

About 86 percent of finance workers abide by their companies’ in-office requirements, the Pulse poll found, but those who fail to go along rarely have been disciplined: of 1,320 professionals surveyed, only 28 said they have been scolded by their bosses or HR departments.

Five respondents said they had been threatened with financial penalties and two reported being told they would be fired if they failed to comply.

Municipal government officials have been at the forefront of the “back-to-the-office” movement.

Eric Adams, New York City’s mayor, likes to say, “you can’t run New York from home,” in part because his city loses more than $12 billion a year in business activity if workers spend an average of 3.5 days a week in the office instead of all five, Bloomberg calculated.

Eateries in Chicago, Philadelphia, and San Francisco have seen lunch business crater compared to pre-COVID traffic, according to Toast, a company providing restaurant management software.

A portion of the lost business is due to inflation; menu prices have climbed, in some cases significantly.

MLIV Pulse is a weekly survey of Bloomberg News readers on the terminal and online, conducted by Bloomberg’s Markets Live team, which also runs a 24/7 MLIV Blog on the terminal. 

TRENDPOST: Threatening to quit your job is easier than actually doing it. However, in a tight labor market employers will be reluctant to risk losing staff.  

Barring a serious recession or not, remote work is now built into the work culture. And as the economy slows down, office tenants will encourage their employees to remotely work so they can cut back on their rental costs.

Also, in the New World Economic and Spiritual Disorder, employers will stop demanding that everyone put in their 9-to-5 at headquarters and instead work with employees to create schedules that allow adequate time to collaborate in person while respecting workers’ need for flexibility.


Banks are tightening lending standards and pulling back from the commercial real estate market. That may be prudent for them in one way but risky in another, according to a Wall Street Journal analysis.

In this year’s first quarter, banks earned a lower return on the assets they owned, such as government bonds, than the rate they paid to borrow to keep operating, the Federal Deposit Insurance Corp. reported.

During this year’s first quarter, many banks increased the interest rates they pay on deposits to keep depositors from shifting their cash to money market funds.

That narrowed banks’ operating margins, forcing them to borrow more to keep solvent, including borrowing from more expensive sources such as federal home loan banks.

Early in the COVID War, banks were flooded with cash as people stayed home and cut spending.

To put those dollars to work earning interest amid economic turmoil, banks bought the safest investments they could: U.S. government bonds.

At the time, those bonds were paying rock-bottom interest rates.

As the U.S. Federal Reserve began raising interest rates, banks were unable to sell those bonds to raise needed cash because investors were buying newer bonds paying higher interest rates.

Now banks are holding assets returning perhaps 1 or 2 percent while they borrow from the Fed at 5.25 percent.

In contrast, banks’ commercial real estate loans earned them 5.4 percent in this year’s first quarter, FDIC data shows.

About $270 billion of those loans will mature this year and many owners of office towers will need to refinance them. 

Those loans could be refinanced at a higher rate, helping banks recoup the losses they continue to incur on their low-yield government bonds.

However, those property owners have problems of their own: the national rate of office vacancies stood at a record 18.6 percent in this year’s first quarter. 

Many owners are struggling with shrinking margins as they cut rental rates to attract and keep tenants and also are offering perks such as free redecorating.

Others have begun to surrender their properties to their lenders or simply declare bankruptcy, as we noted in “Top Private Equity Firm Defaults on Two Office Tower Loans” (21 Feb 2023) and “Office Tower Owner Defaults on $1.7 Billion in Mortgages” (28 Feb 2023).

The rate of commercial real estate loans 90 days or more past due jumped from 0.56 percent in 2022’s final quarter to 0.79 percent in this year’s first three months—still a small number but a 30-percent increase, much higher than other loan categories, according to the FDIC.

“Banks need to boost their yields,” the WSJ said, but “a key question is whether there will be enough creditworthy loans to make.”

TRENDPOST: There will not be enough of those creditworthy loans to make banks whole.

Because of the office building bust, banks will be less profitable and some will fail outright or sell themselves to other banks before they do.

The broader result: fewer banks means fewer loans to homeowners and small businesses, crimping the economy as it struggles to avoid recession.


Employees working at home are keeping stores in their local city neighborhoods busy while office towers in city centers struggle to lure tenants and nearby businesses disappear, The Wall Street Journal said in a 31 May report.

Major urban centers such as Chicago, Los Angeles, and New York are still magnets, according to data regarding rents and foot traffic the WSJ examined. However, spending has shifted away from downtown business districts.

In April 2023, residential rates in New York’s Greenwich Village had shot up 30 percent since April 2019. In Los Angeles’s Brentwood district, the median increase is 63 percent.

“We’re now back to what cities really are,” city planning expert Richard Florida, a professor at the University of Toronto, told the WSJ. Cities are not “containers for working” but instead are “places for people to live and connect with others.”

Ex-commuters have transferred their weekday economic activity to shops, restaurants, gyms, and other businesses closer to home, injecting new vitality into areas such as Brooklyn’s Dismas Park and Georgetown in Washington, DC.

In contrast, foot traffic in the center of Los Angeles has plunged 30.7 percent below pre-COVID levels. 

In Chicago, there are 27.2 percent fewer visitors downtown, while the residential Logan Square neighborhood is seeing activity almost restored to its 2019 level.

However, “the increased vibrancy of great urban neighborhoods will never be enough to offset the decline in [cities’] property tax revenues caused by remote work and the falling value of commercial office buildings,” Florida pointed out.

In Chicago’s central business district, 28 percent of retail storefronts were vacant last year, compared with 15 percent in 2019, according to brokerage Stone Real Estate.

Walmart will close four of eight stores in Chicago after five years of increasing losses.

However, in the city’s River North district, retail vacancies have dropped by almost 3 percentage points since 2019, largely on the popularity of its restaurants, the Stone brokerage noted.

Another source of evidence: corporate lunch deliveries.

TREND FORECAST: Prior to the COVID War, in 2019, 93 percent of those delivery orders came from New York City’s business district; now the figure is about 85 percent, delivery service Grubhub reported. Chicago’s city center accounted for about 80 percent of lunch deliveries to offices and now makes up about 60 percent.

We note this since there will never be a full return to fill up the vacant offices or bring the office occupancy rates back to pre-COVID War levels. Therefore, as evidenced with San Francisco, crime and homeless rates will escalate and more building owners will default on their debts which will bring down many more banks… as well as city neighborhoods. 


More than a year after the U.S. began to recover from the COVID War, New York City’s most famous district still suffers.

International tourists who flocked to Times Square by the tens of thousands each year have not returned in the same numbers. 

Most important, the shift to remote work has robbed the neighborhood of the commuters who kept its shops alive. Those home-based workers have transferred their spending to their local neighborhoods, as we note in “Neighborhoods Thrive While Office Districts Wither” in this issue.

Times Square’s ills are emblematic of downtown business districts across the U.S., David Downey, CEO of the International Downtown Association, said to The Wall Street Journal.

In the borough of Manhattan, where Times Square is, more than 5,200 businesses closed from 2020 through 2021, the New York City comptroller’s office said, marking the first time Manhattan had housed a minority of the five-borough city’s businesses.

Businesses that have survived are still waiting for their revenues to match those of 2019, many owners told the WSJ.

Times Square’s Toasties Deli, which caters to office workers, sees only about 40 percent as many customers as it did pre-COVID, manager Rony Arreaga told the WSJ.

Less than half of the office workers who used to commute to the city on a given day still do, according to card-swipe data collected by Kastle Systems, a security firm. Just before COVID arrived, daily occupancy was above 90 percent.

Each commuter who came to the city every workday spent about $4,600 a year in Manhattan’s shops, restaurants, and service businesses, the research service WFH calculated.

“I hope more corporate clients and tourists come back,” one Times Square restaurateur told the WSJ. “That’s sort of the remedy for success.”

TREND FORECAST: Corporate clients will not “come back.” In fact, as the economy goes into recession, more corporations will be cutting back on office space to save money. Again, the socioeconomic, mental and physical damage caused by the COVID War is incalculable.

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