“Ghost towns.” That is how Bloomberg reporters recently described London, New York, and San Francisco, all of which experienced significant decreases in workplace activity during the pandemic. Such a bleak scenario seems a logical outgrowth of a trend researchers at the Brookings Institution observed in the spring. They noted that “the pandemic pivot to telework has flatlined downtown activity and raised existential questions about its future.”
Nevertheless, there is hope for downtowns hit hard by the pandemic. Many experts believe that recovery won’t be simple or quick, but that it is entirely feasible.
The ultimate goal of recovery efforts is to create environments where people live, work, and play. In the view of Eric Northbrook, SIOR, executive managing director and partner at Voit Real Estate Services in San Diego, ideal downtowns operate 24/7. For city planner Karin Brandt, founder and CEO of the technology firm coUrbanize, they are walkable and accessible places where people can accomplish most of their tasks and activities. Frank Martin, SIOR, senior associate broker at Hall Associates Inc. in Roanoke, Va., emphasizes the need for vibrant retail and restaurant communities. He also believes that ideal downtowns house large populations of residents.
EFFECTS OF THE PANDEMIC
Downtowns that met or were close to meeting these criteria encountered major obstacles when the pandemic erupted, bringing with it an exponential rise in remote work. Remote work, in turn, prompted many residents to move from high-density areas—at least temporarily—and many companies to rethink their space needs and locations.
“Many metro areas are only starting to grapple with the pandemic’s aftereffects,” says Theresa Agovino, the workplace editor at the Society for Human Resource Management. In an article entitled “Pandemic Dims Big Cities’ Bright Lights,” she characterizes the exodus of companies and individuals from urban centers as “bad news for big-city economies,” explaining: “Fewer patrons for restaurants, bars, stores and services means fewer establishments can survive and fewer workers will be needed. It also means less sales tax is collected. Meanwhile, declining rents stifle building values, which, in turn, squeeze property taxes, which are based on appraisals.”
Brian Zrimsek, industry principal at the proptech firm MRI Software, believes that cities largely dependent upon public transport were affected to a greater extent than others. The “ghost towns” of New York, London, and San Francisco serve as cases in point. All three are reliant upon public transport, and all three, according to the Bloomberg article, are experiencing workplace activity about 50% below their usual levels.
Read the full article in the Fall 2021 issue of SIOR Report, available now!