Winston & Strawn Sponsors the Commercial Observer’s Fall State of Office Forum

Winston & Strawn recently sponsored a prominent real estate event where industry leaders gathered to discuss the evolving dynamics of the New York City office market. Partner William Lang served as a moderator, guiding insightful conversations throughout the event. The discussion centered on four key takeaways.

Key Takeaways:

1. Flight to Quality: Demand for Class A or A+ office space is high, with newly constructed, fully amenitized buildings filling up quickly and achieving top rents. Recently renovated buildings with solid amenities are also in high demand. Class B and C buildings have not yet experienced this increased demand, but the expectation is that once Class A properties fill, lower-tier buildings will start to benefit.
2. Return to Office: Several panelists noted that the “return to office” discussion is “over,” with many financial institutions, law firms, real estate companies, and other industries requiring employees to be in the office 4-5 days per week. This has led to rising foot traffic in New York City and a steady increase in office leasing demand, becoming a key driver of the current market.
3. Necessity for Amenities: “Amenities” was the buzzword echoed throughout the event. Panelists agreed that having quality amenities is essential for attracting new tenants and retaining current ones. Tenant engagement was emphasized as crucial, with property owners focusing on building a brand for their buildings through the variety of amenities offered.
4. Office to Residential Conversion: Office-to-residential conversion was another hot topic, particularly for Class B and C buildings. While these buildings may be better suited as residential assets, high costs and lengthy conversion times remain significant challenges. Panelists highlighted changes to zoning regulations as a critical step toward making these conversions viable in the future.

This event provided valuable insights into the key trends influencing the New York City real estate market and offered a comprehensive view of the opportunities and challenges ahead.