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While many companies are plotting out a gradual return to the office, others seem to be looking to rip the Band-Aid off.
Related Cos. CEO Jeff Blau said that as soon as New York enters Phase 2 of its reopening plan, he expects every one of his employees back in the office.
“Related is going back in full force,” said Blau, speaking on Walker & Dunlop’s weekly webcast on Wednesday. “I’ll be there and my entire team will be there.”
To enter Phase 2, which would allow for salons, in-store retail and offices to reopen, New York will need to hit certain benchmarks for coronavirus-related hospitalization and testing. While the city could be open as early as June 22, Mayor Bill de Blasio has said that a July reopening looks more likely.
Of Related’s approximately 4,000-member workforce in the U.S., Blau said around 60% have not been able to work from home, and have been traveling to work in buildings and on construction sites since the coronavirus pandemic began.
“Our field workers have been out there doing their jobs through this,” Blau said. “As soon as our corporate office is open, we need to be there to support them.”
Blau said the decision also came down to his belief that bringing back the office workforce would inject much-needed capital and life into downtown restaurants, cafés and shops and jump-start urban economies.
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That same belief also seems to have motivated another choice: Related is weighing whether to repurpose Neiman Marcus' location at the heart of Hudson Yards and rent out the 380K SF department store footprint as office space instead. Blau said Related has filed a new lease with Neiman Marcus, but the chain, which declared bankruptcy in early May, has not yet accepted or rejected the lease.
Rent collections in Related’s Class-A office assets are near 100%, Blau said, but retail collections in Hudson Yards are at about 40%. If Neiman decides not to reopen at Hudson Yards, Blau said he would favor replacing the store with office space rather than find another retail tenant.
“If we convert Neiman and put a tech company in there with 2,000 employees, the foot traffic generated would provide much more business to retailers down below than another department store would,” Blau said.
Blau said that he was “bullish” on similar efforts across the country to repurpose the department stores that bookend many American malls, using the footprints to build new office and apartment complexes.
This feature was produced in collaboration between the Bisnow Branded Content Studio and Walker & Dunlop. Bisnow news staff was not involved in the production of this content.
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