Why the Empire State Building, and New York, May Never Be the Same

The Empire State Building, like the city it inhabits, relies on a steady stream of tourists, thriving retail businesses and companies willing to lease its vast amount of office space.

The coronavirus pandemic emptied out the attractions, shops and offices, in both the building and the city, for months. The Empire State Building, like the city it inhabits, relies on a steady stream of tourists, thriving retail businesses and companies willing to lease its vast amount of office space.

The coronavirus pandemic emptied out the attractions, shops and offices, in both the building and the city, for months.

Now, as a promised return to normal has once again been put on hold, the plans being made by the building’s occupants reveal a meaningful cultural shift. Now, as a promised return to normal has once again been put on hold, the plans being made by the building’s occupants reveal a meaningful cultural shift.

Interviews with dozens of the building’s tenants and an analysis of public records suggest that the role of the office building in America has changed, perhaps permanently, and that local economies once centered on the traditional 9-to-5 workday face an uncertain future. Interviews with dozens of the building’s tenants and an analysis of public records suggest that the role of the office building in America has changed, perhaps permanently, and that local economies once centered on the traditional 9-to-5 workday face an uncertain future.

The Observatory Like other tourist attractions around New York City, the famous observatories on the Empire State Building’s 86th and 102nd floors sat nearly empty for months. The Observatory Like other tourist attractions around New York City, the famous observatories on the Empire State Building’s 86th and 102nd floors sat nearly empty for months.

In the second quarter of 2019, nearly a million people visited the observatory. This simulation shows the 86th-floor observation deck at maximum capacity on a typical day before the pandemic. In the second quarter of 2019, nearly a million people visited the observatory. This simulation shows the 86th-floor observation deck at maximum capacity on a typical day before the pandemic.

In the second quarter of 2021, the observatory had 162,000 visitors — an improvement over the first quarter, but still 83 percent below the same period in 2019.

The observatory’s predicament underscores the collapse of tourism in New York City, which had an estimated 45 million fewer visitors in 2020 than the year before, depriving the city of over $30 billion in spending. In the second quarter of 2021, the observatory had 162,000 visitors — an improvement over the first quarter, but still 83 percent below the same period in 2019.

The observatory’s predicament underscores the collapse of tourism in New York City, which had an estimated 45 million fewer visitors in 2020 than the year before, depriving the city of over $30 billion in spending.

The Offices Most of the Empire State Building is dedicated to office space. With its mix of big and small businesses, the building is perhaps a better barometer of the state of office space in New York and the city’s economy than the towers dominated by global firms. The Offices Most of the Empire State Building is dedicated to office space. With its mix of big and small businesses, the building is perhaps a better barometer of the state of office space in New York and the city’s economy than the towers dominated by global firms.

The company that owns the Empire State Building, and its chief executive, Anthony Malkin, declined to answer questions for this article. But 48 tenants, who represent nearly half of the building’s office space, shared their plans for returning to the office with The New York Times or announced them publicly. The company that owns the Empire State Building, and its chief executive, Anthony Malkin, declined to answer questions for this article. But 48 tenants, who represent nearly half of the building’s office space, shared their plans for returning to the office with The New York Times or announced them publicly.

Tenants who represent 41 percent of the building’s office space said that when they return to the office, they will embrace a hybrid work model, in which employees have the option to work remotely at least part of the time.

The tenants who plan to return to the office full time or otherwise have not settled on return-to-office plans represent just two percent of the office space. Tenants who represent 41 percent of the building’s office space said that when they return to the office, they will embrace a hybrid work model, in which employees have the option to work remotely at least part of the time.

The tenants who plan to return to the office full time or otherwise have not settled on return-to-office plans represent just two percent of the office space.

Tenants who hold leases for about two percent of the office space said that they have decided to leave the building and that the pandemic influenced their decision.

Other tenants who have decided to leave, who represent about three percent of the space, said the pandemic did not influence their decision. Tenants who hold leases for about two percent of the office space said that they have decided to leave the building and that the pandemic influenced their decision.

Other tenants who have decided to leave, who represent about three percent of the space, said the pandemic did not influence their decision.

In all, a vast majority of tenants who shared their plans are remaining in the building, and only a small share have decided to give up their office space. But whether a company had the option to leave was generally determined by its lease agreement. In all, a vast majority of tenants who shared their plans are remaining in the building, and only a small share have decided to give up their office space. But whether a company had the option to leave was generally determined by its lease agreement.

All of the tenants who said they left the building, or plan to, were in leases or sublet agreements that happened to end during the pandemic or will end soon. All of the tenants who said they left the building, or plan to, were in leases or sublet agreements that happened to end during the pandemic or will end soon.

Michael Feldschuh, the chief executive of Daxor, a medical equipment company that had been in the building since 1990, said employees began working from home in March 2020 and never returned. When its lease expired in the summer of 2021, Daxor chose to end it.

“We’ve found ourselves being able to work in ways that we couldn’t imagine were possible before,” Mr. Feldschuh said. “We just thought for so long we needed an office to be efficient, and that’s not true.” Michael Feldschuh, the chief executive of Daxor, a medical equipment company that had been in the building since 1990, said employees began working from home in March 2020 and never returned. When its lease expired in the summer of 2021, Daxor chose to end it.

“We’ve found ourselves being able to work in ways that we couldn’t imagine were possible before,” Mr. Feldschuh said. “We just thought for so long we needed an office to be efficient, and that’s not true.”

Carol Schrager, an attorney who was subletting a suite on the 43rd floor, also began working remotely in the early days of the pandemic.

“I began to notice that I was on phone calls with adversaries and clients and even judges,” she said. “They were working remotely too. I realized that dogs were barking in the background and kids were screaming and it became a common thing to do, and it didn’t subside.”

When her sublet agreement ended in April 2021, Ms. Schrager decided not to renew it. Carol Schrager, an attorney who was subletting a suite on the 43rd floor, also began working remotely in the early days of the pandemic.

“I began to notice that I was on phone calls with adversaries and clients and even judges,” she said. “They were working remotely too. I realized that dogs were barking in the background and kids were screaming and it became a common thing to do, and it didn’t subside.”

When her sublet agreement ended in April 2021, Ms. Schrager decided not to renew it.

Very few tenants who had leases that were expiring during the pandemic said they decided to renew them. One was the Allen C. Schneider & Co. accounting firm, which rents a suite on the 31st floor. Ira Lippel, a managing partner at the firm, said the building’s management offered them incentives to stay.

“They were very, very, very anxious to see if they can lock me back in again, and they’re trying to be as agreeable as possible to make sure that I stay,” Mr. Lippel said. “There was considerable savings.” Very few tenants who had leases that were expiring during the pandemic said they decided to renew them. One was the Allen C. Schneider & Co. accounting firm, which rents a suite on the 31st floor. Ira Lippel, a managing partner at the firm, said the building’s management offered them incentives to stay.

“They were very, very, very anxious to see if they can lock me back in again, and they’re trying to be as agreeable as possible to make sure that I stay,” Mr. Lippel said. “There was considerable savings.”

Many of the tenants who plan to stay in the building have years remaining on their leases, and generally have to pay that rent in full, whether they fully occupy their offices or not. Often, the only way to offset the cost of unused space is to sublet it to another company. This is why New York’s office landlords have been able to collect rents — and avoid a big financial crunch — even as office space sits empty.

When employers do bring workers back to their offices, many will allow them to work remotely at least part of the time. In Manhattan, 70 percent of employers plan to embrace the hybrid model, according to a recent survey. Many of the tenants who plan to stay in the building have years remaining on their leases, and generally have to pay that rent in full, whether they fully occupy their offices or not. Often, the only way to offset the cost of unused space is to sublet it to another company. This is why New York’s office landlords have been able to collect rents — and avoid a big financial crunch — even as office space sits empty.

When employers do bring workers back to their offices, many will allow them to work remotely at least part of the time. In Manhattan, 70 percent of employers plan to embrace the hybrid model, according to a recent survey.

That group includes LinkedIn, the Empire State Building’s biggest tenant, which holds leases on 10 full floors and part of another, paying at least $26 million in rent every year. The company recently said it was relaxing its return-to-office plans to give employees more freedom to work from home.

“We’re embracing flexibility with both hybrid and remote roles, expecting more of us to be remote than pre-Covid and removing the expectation of being in the office 50 percent of the time,” Ryan Roslansky, the company’s chief executive, wrote in a blog post in late July. Note: LinkedIn leases space on the 24th floor that is not shown. That group includes LinkedIn, the Empire State Building’s biggest tenant, which holds leases on 10 full floors and part of another, paying at least $26 million in rent every year. The company recently said it was relaxing its return-to-office plans to give employees more freedom to work from home.

“We’re embracing flexibility with both hybrid and remote roles, expecting more of us to be remote than pre-Covid and removing the expectation of being in the office 50 percent of the time,” Ryan Roslansky, the company’s chief executive, wrote in a blog post in late July. Note: LinkedIn leases space on the 24th floor that is not shown.

Another tenant going hybrid is Funaro & Co., an accounting firm that has occupied the building’s entire 41st floor since 2008. Another tenant going hybrid is Funaro & Co., an accounting firm that has occupied the building’s entire 41st floor since 2008.

Before the pandemic, the office was bustling, with nearly 100 employees there every day, and the company was considering an expansion to make room for all the workers. There was no remote-work policy and, in fact, employees were discouraged from working outside the office. Before the pandemic, the office was bustling, with nearly 100 employees there every day, and the company was considering an expansion to make room for all the workers. There was no remote-work policy and, in fact, employees were discouraged from working outside the office.

Now, fewer than 10 people work in the office every day. Over the past 16 months, several partners at the firm have relocated outside New York City, including one who moved to Los Angeles and another to Germany. The company has also hired several employees in the Midwest, conducting interviews only over the phone or video conferencing. Now, fewer than 10 people work in the office every day. Over the past 16 months, several partners at the firm have relocated outside New York City, including one who moved to Los Angeles and another to Germany. The company has also hired several employees in the Midwest, conducting interviews only over the phone or video conferencing.

Funaro renewed its lease in December 2019. If the lease had come up during the pandemic, according to Joseph Catalano, a partner at the firm, it most likely would not have been renewed. It now expires in 2025. To adapt to the new reality, the firm may try to sublet a portion of the 41st floor. Funaro renewed its lease in December 2019. If the lease had come up during the pandemic, according to Joseph Catalano, a partner at the firm, it most likely would not have been renewed. It now expires in 2025. To adapt to the new reality, the firm may try to sublet a portion of the 41st floor.

The Retail Stores The retail space on the Empire State Building’s ground floor was once in high demand thanks to its proximity to office workers and tourists roaming Midtown, but the pandemic has reduced that foot traffic to a fraction of what it once was.

The average rents for Manhattan retail shops, falling even before 2020, have plunged to their lowest level in nearly a decade, according to CBRE, a real estate services company. The Retail Stores The retail space on the Empire State Building’s ground floor was once in high demand thanks to its proximity to office workers and tourists roaming Midtown, but the pandemic has reduced that foot traffic to a fraction of what it once was.

The average rents for Manhattan retail shops, falling even before 2020, have plunged to their lowest level in nearly a decade, according to CBRE, a real estate services company.

In addition to the space in the building that was already empty before 2020, at least three storefronts temporarily closed during the pandemic. One was a sushi restaurant on 33rd Street that has yet to reopen, and the others were Starbucks cafes — one on 33rd Street, and one on 34th. In addition to the space in the building that was already empty before 2020, at least three storefronts temporarily closed during the pandemic. One was a sushi restaurant on 33rd Street that has yet to reopen, and the others were Starbucks cafes — one on 33rd Street, and one on 34th.

The small, pickup-only Starbucks on 33rd Street closed in April 2020 for about two and a half months. The store had primarily served office workers, according to Ricardo Aspilaire, a Starbucks employee.

“Without them,” Mr. Aspilaire said, “it’s been hard.”

Daily orders have increased since reopening, Mr. Aspilaire said, but have not yet reached prepandemic levels. “A lot more people are coming back, so hopefully that helps us,” he said. The small, pickup-only Starbucks on 33rd Street closed in April 2020 for about two and a half months. The store had primarily served office workers, according to Ricardo Aspilaire, a Starbucks employee.

“Without them,” Mr. Aspilaire said, “it’s been hard.”

Daily orders have increased since reopening, Mr. Aspilaire said, but have not yet reached prepandemic levels. “A lot more people are coming back, so hopefully that helps us,” he said.

The building’s other Starbucks, on 34th Street, was a more traditional location that included cafe seating. It also closed in April 2020, and reopened in a nearby space in the building in January, now for pick-up orders only. The building’s other Starbucks, on 34th Street, was a more traditional location that included cafe seating. It also closed in April 2020, and reopened in a nearby space in the building in January, now for pick-up orders only.

Gregory Foy, a manager at the Juice Press on 33rd Street, also said business has increased in recent months but that sales are still down about 60 percent from before the pandemic. “Without the tourists, we’ve taken a dramatic hit,” Mr. Foy said.

While some office workers have returned to the buildings around the store, Mr. Foy said he had noticed that many do not come in on Fridays, making it the most difficult day for sales. Gregory Foy, a manager at the Juice Press on 33rd Street, also said business has increased in recent months but that sales are still down about 60 percent from before the pandemic. “Without the tourists, we’ve taken a dramatic hit,” Mr. Foy said.

While some office workers have returned to the buildings around the store, Mr. Foy said he had noticed that many do not come in on Fridays, making it the most difficult day for sales.

The building’s largest retail store is a Walgreens that occupies two floors on the southeast corner. Before the pandemic, the store was open 24 hours a day. Now, it opens at 8 a.m. and closes at 10 p.m.

Tamia Acker, who started working there this summer, said that for many months, the store operated with a skeleton crew. Today, Ms. Acker said, the store is starting to get a steady flow of customers. The building’s largest retail store is a Walgreens that occupies two floors on the southeast corner. Before the pandemic, the store was open 24 hours a day. Now, it opens at 8 a.m. and closes at 10 p.m.

Tamia Acker, who started working there this summer, said that for many months, the store operated with a skeleton crew. Today, Ms. Acker said, the store is starting to get a steady flow of customers.

New York has adapted to other big shocks, but speaking to the Empire State Building’s tenants about their plans — and tracking how they’ve fared in the pandemic economy — reveals that many painfully uncertain months lie ahead. New York has adapted to other big shocks, but speaking to the Empire State Building’s tenants about their plans — and tracking how they’ve fared in the pandemic economy — reveals that many painfully uncertain months lie ahead.

For every LinkedIn, a company that has thrived in the pandemic, there may be several other companies that are struggling to deal with economic shifts and disruptions.

For instance, Global Brands Group, a Hong Kong-based footwear and apparel business that is one of the Empire State Building’s largest tenants, filed for bankruptcy protection in July, owing rent the building might not recoup. For every LinkedIn, a company that has thrived in the pandemic, there may be several other companies that are struggling to deal with economic shifts and disruptions.

For instance, Global Brands Group, a Hong Kong-based footwear and apparel business that is one of the Empire State Building’s largest tenants, filed for bankruptcy protection in July, owing rent the building might not recoup.

“If you are in a downturn, no one really knows when the market is going to snap back,” said Daniel Alpert, a seasoned commercial real estate investor and a managing partner of Westwood Capital, a small financial firm.

In Manhattan, 19 percent of office space is available for rent, according to Newmark, a real estate services company. That is roughly double the average rate of the last decade. “If you are in a downturn, no one really knows when the market is going to snap back,” said Daniel Alpert, a seasoned commercial real estate investor and a managing partner of Westwood Capital, a small financial firm.

In Manhattan, 19 percent of office space is available for rent, according to Newmark, a real estate services company. That is roughly double the average rate of the last decade.

Mr. Alpert said the Empire State Building, an older skyscraper with a lot of small and medium-size businesses as tenants, is more vulnerable to the current convulsions than the huge, new office towers that have sprung up in Manhattan more recently.

“But, like the pyramids, it will be there forever,” Mr. Alpert said. Mr. Alpert said the Empire State Building, an older skyscraper with a lot of small and medium-size businesses as tenants, is more vulnerable to the current convulsions than the huge, new office towers that have sprung up in Manhattan more recently.

“But, like the pyramids, it will be there forever,” Mr. Alpert said.