NEW YORK - From Midtown to Wall Street, it’s not quite a ghost town, but there's not much hustle or bustle.

These days "The Fearless Girl" stares across a mostly empty plaza outside the New York Stock Exchange.

What You Need To Know

  • Commercial real estate firm Avison Young reports Manhattan office vacancy rate increased from 10 percent in Q1 to 10.9 percent in Q2

  • Time Equities Inc. says only about five percent of its Manhattan office tenants have negotiated for less space

  • Analysts expect vacancy rates to rise and office rents to continue to fall 

“It just seem to be spiraling further and further out of control,” said Rosetta Wines owner Shermon Peters.

Peters says before the pandemic 10,000 people an hour would rush by his store on their way to Wall Street jobs every morning.

“Now in the morning it's so quiet I actual count, and it averages around 50 people an hour,” he said.

Office building owners say so far, only about 10% of workers have returned to their desks after the shutdown forced by the coronavirus.

“I have over 5,000 square feet right now and I’m the only worker in the space,” said Michael Goldfine, the owner of Goldfine & Company CPA PC.

He says his accounting firm employees 20 people and they all work from home.  So, he’s in negotiations with his landlord to lease less space.

“I think I can suffice with probably half,” he said.

Now, imagine if even a quarter of companies renting space want to reduce their office's footprint. That’s why some analysts fear there could be a glut of commercial real estate for years to come, costing the city billions of dollars in tax revenue.

“It is a little too early to tell what companies are going to do,” said James Nelson of Commercial Real Estate Firm Avison Young.

Nelson says landlords and lenders have allowed companies to defer rent payments and some businesses have been able to pay partial rents through the federal Paycheck Protection Program.

“The big question is once that dries up and once the lenders say ok it’s been six months, what are we doing here? Nelson asked hypothetically.  “If those tenants aren’t back and paying rent, I think that’s where the challenge is.”

Time Equities Inc. says only about 5% of its Manhattan office tenants have negotiated for less space. It says companies with fewer workers in the office may still need the same amount of space as before because of social distancing needs.

“I have yet to have a very large tenant, 50,000 square feet saying we need to reduce footprint down to 20,” said Brian Soto of Time Equities Inc.

Shermon Peters has to renegotiate his lease and defer payments to his lenders.  He sees no end in sight because just a block from wall street there’s no suit in sight.

“We haven’t bottomed out yet,” said Peters.

The big issue in the future will be tax revenues.  The city's Independent Budget Office says, as building owners collect less in rents, their property values will diminish and the city will therefore take in less property tax.