Penn Station Redevelopment: Needed but Misguided
If you know me you'll remember my time years ago interviewing Long Island Rail Road riders as they ventured back home after a Big Night in Manhattan. So it was much to my surprise and delight to catch a glimpse of what's starting to become a renovated concourse at Penn Station - one with taller ceilings, wider walkways, and more natural light. This is the earliest precursor to what state officials and developers hope to be a vastly larger project in the area which redevelops Penn Station and leads to the construction of 10 new towers nearby - mostly dominated by offices. But given we're in a climate where 19% of Manhattan office space is vacant and the work-from-home phenomenon persists, is this not a plan which is out-of-touch with reality?
Office occupancy remains stubbornly low at 35.3% as of late August (Kastle Systems)
Average Manhattan rental prices are above $5,000 per month for the first time (Miller)
The vacancy rate for Manhattan homes has hovered around 2% throughout 2022 (Bloomberg)
18 million square feet of space would be created around Madison Square Garden (NYT)
I would make the argument that if the city is providing tax breaks to assist the new construction of buildings around Penn Station it's common sense that a larger share should be dedicated towards apartments. Thousands of units can be dedicated to much needed affordable housing that would be in the heart of the city. This would increase supply in an area of the real estate market that's currently underserved. In the current proposal just 1,800 residential apartments will be created while over 75% would be dedicated to office space and a 472 unit hotel. Why in a world that has evolved so much are we chasing plans that were championed by our former governor before the pandemic even began?
Are you on the move? Please feel free to connect with me here if you'd like to schedule time to discuss your plans. I look forward to it. Best, Corey