COVID-19 disruption shuts down New York market, occupiers shift focus to cash management

On Friday March 20th, Governor Andrew Cuomo took unprecedented action and shut down non-essential businesses across the New York region. Mandated isolation and remote working guidelines were implemented with the intent to reduce the spread of COVID-19. Retail storefronts closed and office buildings quickly reduced “in place” occupancy levels to well below 10.0% in the final full week of March. Corporate occupiers will continue to prioritize cash preservation as they explore rental abatement strategies and review business interruption policies. Landlords are bracing for inevitable cash shortfalls due to an anticipated increase in non-payments. Flexible office providers face the perfect storm of evaporated demand, ongoing high cash burn rates due to long-term lease commitments, and a general lack of capital sources as equity risk premiums spiked.

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