Big Cities See Recovery In Residential Areas As Downtowns Lag, New Data Shows
Major American cities are seeing a population recovery from the worst of the pandemic even as remote work reshapes urban centers.
Residential neighborhoods in the country’s largest hubs are experiencing a significant boost from residents returning as traditional office areas continue to languish, The Wall Street Journal reports. New data from a variety of sources shows how hybrid and remote work, a shift some predicted could kill cities, is transforming them instead.
While office leasing has slowed significantly in New York, residential rents in Greenwich Village were 30% higher than they were during the same time in 2019, per data from Douglas Elliman.
Similarly, Placer.ai data shows Downtown Los Angeles is seeing 30% less foot traffic than before the pandemic, but in the residential areas of South Glendale and Highland Park, foot traffic is nearly fully recovered.
In Chicago, the central business district accounted for more than 80% of corporate lunch orders in 2019, according to delivery app Grubhub, but so far this year it represents 60%.
Vacancy is now at 2.5%, per Dougas Elliman data, while the availability rate in the office market in Manhattan is over 17%. The issues surrounding office remain challenging for big cities that have depended on high property valuations for tax revenue.
“We are in a situation right now, particularly with office, that it's unclear where values are going,” Trepp’s Manus Clancy said on Bisnow’s podcast this month. “And in the broader commercial real estate market, certainly, values are down 15%, 20%, 25% since 2022.”