The Real Estate Board of New York plans to release its first quarterly Analysis of Location Data — a measure of Manhattan office building physical occupancy — later in May. It won’t come a minute too soon.
The new REBNY survey, which we first reported, might bring some clarity to commercial real estate’s No. 1 talking point.
It uses data from Placer.ai on the movement of mobile phones into and out of 250 office buildings, a cross-section of the Manhattan inventory.
A preliminary report in February found that returns in 2022 were higher than claimed in the endlessly-quoted Kastle Back-to-Work Barometer, but did not cover early 2023 or offer much detail.
Now, everybody’s waiting for more “granular” quarterly tallies.
Kastle continues to pop up in media coverage of “half-empty” offices despite its flaws.
It has yet to report even 50% average occupancy in the city since it began putting out weekly reports in 2021 — an obvious undercount given landlords’ observations of much higher occupancy and increasingly crowded sidewalks, subways and restaurants.
As we’ve reported more than once, Kastle’s sample, based on key swipes, covers only the office market’s middle and lower rungs — a mix of A-minus and B-class buildings which tend to have fewer employees at desks.
Pundits inclined to depict the office market in its worst light overlook that Kastle’s survey doesn’t include most of the city’s largest landlords, among them SL Green, Vornado, Brookfield, Boston Properties, Related Companies, Tishman Speyer and Rudin. Nor does it include headquarters towers owned by their users, such as Morgan Stanley and JP Morgan Chase.
Such mostly Class-A holdings are home to major financial and law firms with the highest average office use.
A few major owners do use Kastle’s security system which provides the data — but not at their most important buildings, such as Durst’s One Bryant Park and Empire State Realty Trust’s Empire State Building.
The more credible survey by the Partnership for New York City, which uses data from tenant CEO’s, found 52% of employees in their offices. But its most recent report was for January.
The Partnership has updated the data every three or four months but organization president Kathryn Wylde said, “Things are in flux and employers are tired of surveys.”
She said she would “test the appetite” for future reports and they would be no good “without broad participation.”