Focus: New York workers’ return to office ignites deal hopes in battered real estate market

Saeed Azhar - Reuters - 07/03
Investors including Blackstone and wealthy individuals are scouting for office properties in New York as companies call employees back to the office, fueling a nascent recovery in the battered commercial real estate market.
  • Demand is rising for top-quality offices in New York
  • Amazon hunting for space, Blackstone more optimistic
  • Blackstone is looking for purchase of stake in NY office
  • Some firms switching to five days a week of in-person attendance
NEW YORK, March 7 (Reuters) - Investors including Blackstone (BX.N), opens new tab and wealthy individuals are scouting for office properties in New York as companies call employees back to the office, fueling a nascent recovery in the battered commercial real estate market.
The increasing appetite for offices in New York and beyond could signal a broader economic recovery for major cities worldwide as many workers return in person five days a week, lifting demand for local services. The turnaround comes after investors shunned emptied-out commercial spaces for years after the pandemic.
Real estate investors, consultants and bankers say demand is rising for top-quality offices in New York, spurring them to strike more deals. Among the bullish signs are Amazon hunting for space, BXP holding talks with tenants for new building and Blackstone getting more optimistic on the sector.
Blackstone's President Jonathan Gray said offices in New York City and San Francisco offer compelling value.
"In New York, you have financial services firms who are growing rapidly, you don't have any new building," Gray told a conference on Tuesday. "In San Francisco, the values fell very hard, in some cases 75%, and AI and technology innovation really (are) housed in San Francisco."
Blackstone had drastically cut its exposure to office in recent years. Its current office exposure accounts for less than 2% of its real estate holdings, versus more than 60% in 2007, according to company data. Investors struck more office deals last year as the terms for leases improved and tenants became more active, consultants said.
Among those, Blackstone is looking to purchase a large stake in the office building at 1345 Avenue of the Americas in Manhattan. It has declined to comment on its investment plans. "More deals of scale are definitely coming," said David Giancola, a senior managing director of capital markets in the New York office of JLL (JLL...
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