A major bank may shuffle 50% of its New York City staff, which could impact its footprint in the country's largest office market.
Deutsche Bank is considering moving 2,300 workers to locations outside the city after a trial with work-from-home prompted by the coronavirus pandemic was successful, The Financial Times reports.
“I am optimistic that New York remains, to a degree, a hub,” CEO of Deutsche Bank Americas Christiana Riley told the FT. “But it isn’t maybe going to be relevant to all those people [currently working there].”
This comes as more and more financial institutions have signaled a shift away from New York City. Around 20 Moelis & Co. bankers moved from New York to Florida during the pandemic after getting permission to do so from CEO Ken Moelis, Bloomberg reported last week. Goldman Sachs — a New York institution — is reportedly moving some of its offices to Florida as well.
The move by the two companies among others may reflect a shift in the real estate market, analysts said of the companies' announcements. Office rents have dropped precipitously this year as companies have flooded the sublease market with space. Occupancy at NYC offices is still below 20% as landlords have pleaded with companies to tell their workers to return.
While some argue that the office market will see a rebound once the vaccine is available for widespread use, it will likely be forever changed by the pandemic. Developers in Midtown Manhattan are thinking of broad changes to their spaces to offer incentive for workers to return, and the Real Estate Board of New York suggested turning some of the unused offices into housing.
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