Next stop: the office in The Big Apple

Submarkets near major transit stops across New York City are getting busier.

Doors open, and workers rush out and fill station platforms. This was an everyday occurrence…until it wasn’t. The pandemic left behind quiet cars, empty sidewalks, and changes to how we did just about everything, including work.

While we may still be feeling the impacts, there are signs of a return to normal across city landscapes—if you know where to look. In New York City, it’s in places with a high density of financial services sector tenants and proximity to transit.

First stop: Grand Central

It’s a trend first noticed in office markets near the biggest subway and commuter rail station of them all: Grand Central. From June 2021 to June 2022, the Grand Central submarket saw recovery near pre-pandemic numbers, along with huge spikes in office busyness within office locations, notably trophy and class A buildings.

The market was bolstered by the return of workers across many financial institutions, the early adopters of return-to-office (RTO) mandates. The finance industry’s bullishness on RTO helped account for the 113.8% increase in office busyness in the area from June 2021 to June 2022.

Beyond Grand Central, the Central Park submarket, located within walking distance from Grand Central Terminal, also saw a sizeable increase in office busyness within that time frame for similar reasons: financial services institutions leasing or remaining in large footprint office spaces.

Availability of Grand Central’s trophy and class A dropped from a rate of 19.3% to 18.2% and Central Park’s availability dropped from 20.5% to 17.8%.

Positive trends across financial services-heavy office markets near Grand Central and Central Park were hardly just a blip on the radar. Two years later, they have not only remained but could guide the way for other submarkets to follow.

Next stop: Penn Station

Two years after offices near Grand Central started buzzing again, it’s now the Penn Station market’s turn.

From June 2023 to June 2024, trophy and class A buildings in the Penn Station submarket saw a 47.9% increase in office activity.

And just like Grand Central’s ripple effect to the Central Park market, Penn Station’s recent rise is extending into nearby sub-markets like Hudson Yards, a market seeing a year-over-year increase of +14.0% in office busyness.

In this time frame, Penn Station’s trophy and class A availability rate dropped from 27.1% to 24.3% and Hudson Yards’ dropped from 17.0% to 13.8% as a mix of diverse tenants maintained or signed leases.

Financial, pharma, tech—you name it. Virtually every industry is part of the tenant mix launching the current resurgence near Penn. This points to broader returns across the office market that aren’t solely driven by financial sector workspaces.

It leads to a question: if patterns like these can emerge and sustain near Grand Central and Penn, where else along subway and rail lines could we see similar patterns pop up next?

End of the line: locating demand for workplaces across NYC and beyond

It’s clear something is happening near major subway stations across NYC, notably in markets with high percentages of financial services tenants.

For those hoping to encourage workers to come to the office, location, location, location could matter more than ever before.

“You hear the phrase flight to quality again and again in today’s market. It speaks to both the quality of asset and the quality of location. And in New York City, nothing is more central to the desirability of a location than its proximity to the subway.”

Rory Murphy
Principal and Market Leader, New York City

Are similar transit-oriented hot spots spiking in office activity outside of The Big Apple? Explore Office Busyness across the U.S. to discover where your city’s Grand Central or Penn Station may be.