But I think this is just the tip of the commercial real estate iceberg. If you would permit me to suggest, something else may be happening. Many of the industries, and not just businesses, but industries, that have been headquartered in New York City have moved to regions of the country that have lower tax bases and lower costs of living. In addition, New York City is no longer the port city it had once been. Newark has emerged, Atlanta has increased, and even regions on the Gulf Coast have become major ports of entry. And America is exporting less. Back 35 years ago, downtown Manhattan was populated by a landscape of shipping companies, insurance companies, and Wall Street financial firms. That is no longer the case. The shipping companies have moved. The insurance companies no longer are in the Northeast. And Wall Street has moved down to Texas in many cases. Just look at JP Morgan moving much of its operation down to Texas.
The New York Post reported: “Nearly 160 Wall Street firms have moved their headquarters out of New York since the end of 2019, taking nearly $1 trillion — yes, that’s trillion with a “T” — in assets under management with them, according to data from 17,000 companies compiled by Bloomberg…In all, 56 of the New York firms have decamped to Florida, while most of those remaining also headed to warmer states such as Texas and the Carolinas, according to the report.”
And even though it appears that much of the industry that had been operating out of New York is no longer there, New York City’s configuration for traffic has gotten even worse. Plus, now the MTA is looking to begin to enforce congestive pricing upon drivers because the MTA can’t afford to operate.
Until New York City begins to address its foundational issues of being too expensive to operate a business and live, this region cannot encourage and attract business back to its 5 boroughs. Just look at when Amazon wanted to build a headquarters here, the city government turned its back upon the idea. So until the government understands that it needs to be business-friendly, the commercial real estate industry in New York will continue to nosedive.