“Tthey used to stand at the three-deep bar, “says John Moran, inspecting the long, empty counter at Killarney Rose, a Wall Street bar that, in another era, would have been filled with early-shift construction workers and lunch and until late at night, bankers in suits.
The world’s main financial avenue, at least throughout the 20th century, is a ghost of what it once was. The New York Stock Exchange and Nasdaq are still here, but dozens of financial institutions have emptied themselves of New York’s financial district in an exodus that began in the wake of 9/11 and has been accelerated by Covid.
This week, Deutsche Bank, the last major bank in the historic bloc, announced that it would accelerate its departure from its offices at 60 Wall Street and could move up to half of its 4,600 Manhattan employees to regional offices in the next five years.
Deutsche’s move does not surprise Moran. New York’s financial district has been transforming into a residential area, with a handful of media and tech firms, including Condé Nast, Time Inc, Group M, and Spotify, for years.
“All of this started after 9/11. People were scared because Wall Street was a target. As soon as that happened, it was like: let’s go out, ‘”Moran said.
Deutsche’s plan, which is to move some of the staff to Columbus Circle near Central Park, resembles a pattern: leave Wall Street for other areas of the city and then begin to decentralize operations away from Manhattan entirely.
JP Morgan, which was based at 23 Wall Street In 1869, he follows a plan to move jobs out of Manhattan after the mayor, Bill de Blasio, denied the bank a billion dollars in tax incentives to keep employees in New York. Last week Bloomberg reported that Goldman Sachs was weighing plans for a new Florida hub to house its key asset management division, in part to cut $ 1.3 billion in costs.
But it is one thing to relocate administrative, technology and business operations jobs, and another to move operations to the customer, a move that could diminish New York’s prestige as the home of the U.S. financial industry and exacerbate its projected budget deficit of $ 9 billion for the next two years.
If Goldman leaves its headquarters adjacent to Wall Street, it will follow Morgan Stanley, who moved in the mid-1990s, and JP Morgan, who resigned in 2000. Credit Suisse, Barclays, UBS and others have established centers in Florida, Tennessee , North Carolina and Utah.
Manhattan now has more office space available since the aftermath of the 9/11 attacks. According to The Alliance for Downtown New York, commercial leasing in lower Manhattan hit an all-time low of 455,000 square feet in the third quarter, with leasing activity 64% below the five-year quarterly average and only 11% lower. workers occupying offices. in Manhattan they returned to their desks until September.
In 2008, financial and insurance firms accounted for 54% of office occupants, with media and technology at 5%. The figures are now 26% and 22% respectively, according to Jessica Lappin, president of the Alliance for Downtown New York.
“Financial firms have been downsizing for quite some time,” he said. “While this is not good news, it has been exciting to see big household names moving in. It’s a different kind of employee – on the one hand, they wear hoodies and sneakers, have different hours, and bring a different kind of vitality to the area. “
But that vitality can be difficult to detect. There are “for rent” signs at street level everywhere. Companies that had survived the exodus of bankers have been hit hard by the pandemic. China Villa, a popular restaurant turned nightclub, has closed for good. LVMH-owned Tiffany had no buyers Monday before the holidays. Shoemakers and barbers are hungry as usual. “You see the situation. There is no one here, ”said one.
Moran said: “The new crowd, the millennials, are a totally different animal. It’s all 50-inch TVs, stay home and invite some friends for takeout. Technology has changed everything. You don’t see people. When this Covid business ends, the buildings will be half full again. And that’s a fact. “
Real estate agent Colliers International painted a bleaker picture, reporting that rents were down nearly 80% compared to a year ago and 55% since October. “This is higher than it was in the Great Recession [of 2008-9] and higher than in the recession of 2001 “, said Franklin Wallach of Collier.
Christiana Riley, Deutsche’s chief executive in the Americas, said she was “optimistic that New York will remain, to some extent, a hub” and that the institutional capital there would make it “meaningful to have a centralized presence” in the city. but it would not be “relevant to everyone” who works in the industry.
The technology and media sectors and residential property have so far failed to inject comparable power into the area. Apple and Amazon They have rented large spaces near Penn Station, the city’s main transportation hub that is a short drive from Google’s large headquarters on the west side. Publishing House Condé Nast, a key tenant of One World Trade Center, is looking for get out of a $ 2 billion real estate deal that in any case had been subsidized by high tolls in the accesses of the city.
The most important questions remain unanswered. Cushman and Wakefield, one of New York’s largest commercial property owners, recently published a study on the post-pandemic workplace that argued that the future of the office “will be characterized by organizations determining the right balance of work. remote to advance their organizational priorities rather than one who sees a move toward an office-less world. “
Richard Rubin, a West Coast investor turning distressed hotels into residential properties, dismissed as “absurd” the notion that businesses would need more office space due to social distancing. “There has been a sea change in the last year and we know, from a productivity perspective, that people are working very effectively from home,” Rubin said.
He predicted there would be “an absolute carnage in the commercial office market that will eclipse the carnage of retail.” The spectacular physical topography of Wall Street, then, may be all that remains.
“Companies have been paying exorbitant fees for someone to eat their fries, have coffee and use the company gym. Given what is happening in the world in all respects, I am not sure that it is something that can continue. “
Digsmak is a news publisher with over 12 years of reporting experiance; and have published in many industry leading publications and news sites.