Manhattan’s Office Buildings Are Empty. But for How Long?

One of the biggest concerns is that companies could soon start trying to sublease hundreds of thousands of square feet of space that they are not planning to use anytime soon. For companies seeking offices, sublets often provide a shorter lease at a steep discount to market prices.

Starr Insurance Companies, which is led by Maurice R. Greenberg, is seeking to sublet 190,000 square feet that it leases at 399 Park Avenue, according to Colliers. And First Republic Bank, which signed a 211,521-square-foot lease last April for 410 Tenth Avenue, put 151,000 square feet up for sublet, according to a report from the real estate broker Savills. Spokesmen for Starr and First Republic declined to comment.

Sublet space made up about a quarter of the total office space available in New York at the end of the second quarter, according to Savills, and many real estate brokers said they expected that to increase in the coming months.

In January, Ms. Colp-Haber was showing offices to a construction company that she said was in the market for a five-year lease in Manhattan. Last month, the company signed a sublet for one year at a 40 percent discount to the original lease, she said.

Still, property owners claim not to be overly worried because most tenants are paying their rent. They point out that office leases last for years and are very difficult to end early. And large financial firms, among the biggest tenants in New York, aren’t stressed as they were in the last recession.

Article source: https://www.nytimes.com/2020/09/08/business/economy/new-york-office-space-coronavirus.html