Offices on comeback trail
JONATHAN Mechanic, chairman of the Fried Frank law firm’s powerful real-estate practice, is thrilled that his division completed major deals over the work-from-home summer that included the $1.8 billion financing of Brookfield’s One Manhattan West and the $350 sale-leaseback of 522 Fifth Ave.
But he sounded nearly as exhilarated over returning to the firm’s downtown offices at One New York Plaza last week, wearing “a brand-new suit and a yellow tie” after six months working remotely from the Hamptons. He even took a selfie (shown) to prove it.
“I reopened our offices on Sept. 14 for our people to come back on a voluntary basis,” Mechanic said. “It was so invigorating. Our department is very closely knit.
“To me, coming back is a turning toward normalcy. It’s so energizing to be in office surroundings again — even seeing the security guys downstairs, who I know forever.”
Fried Frank’s move back is part of a slow but perceptible trend: Although brokerages report only a small uptick from office occupancies of the 5 to 10 percent before Labor Day, the phenomenon appears to be gaining traction.
JLL tristate President and CEO Peter Riguardi said office use has “definitely increased since then. Not to 25 percent, but it’s increased.” He noted that 40 percent of the commercial real-estate firm’s own workforce were at their desks again at 330 Madison Ave.
“Some companies that told their people not to return until next year are starting to second-guess themselves,” Riguardi said.
Citigroup, for example, appears to be accelerating a partial return that had been originally set for December. The bank now plans to increase metro-area occupancy to 30 percent, from 5 percent by Oct. 5, mainly at its 388 Greenwich St. headquarters, according to insiders. All returns will be voluntary, they said.
A tech-world source said that as many as 2,000 Google employees a day — about 40 percent of its city workforce — had begun returning to the company’s Manhattan locations. Google, which recently said employees wouldn’t need to return to the office till next summer, wouldn’t discuss numbers but said a “the majority continue to work from home.”
JPMorgan Chase CEO Jamie Dimon recently ordered senior traders back to their desks by Monday. Although one employee who was already in the office was diagnosed with COVID-19 and sent home, the return policy stands.
Bank spokesman Brian Marchiony said, “We won’t hesitate to reverse course if we start to see worrying trends.” But, he added, “There has been no meaningful increase in cases, and the very limited cases we’re seeing are not related to a return to the office.”
Some resistance is coming from employees who are still afraid to use mass transit or to congregate in offices, even at 50 percent capacity. To help lure them back, private-equity giant Blackstone, for instance, is paying for taxi and car service.
Indoor restaurant service at 25 percent capacity, which starts Sept. 30, could also help coax back office workers unwilling to eat at their desks, especially in Midtown, where outdoor dining options are fewer than in residential neighborhoods.
“Manhattan by and large is not a brown-bag culture, CBRE superbroker Mary Ann Tighe chuckled.
Michelin-starred restaurant Caviar Russe is doubling down on its commitment to luxury cuisine — and to limping Madison Avenue. Its second-floor dining room at 538 Madison, near East 55th Street, will soon be joined by a ground-floor caviar bar and retail shop. The 2,000-square-foot venue, previously home to a ski boutique, will open in October or November, depending on construction, said managing director Ilya Panchernikov. The exterior will sport a new look and be rebranded as the Caviar Russe Building.
He made the deal directly with longtime landlord Metropole Realty Advisors. Terms were not available.
“We did take the space pre-COVID,” Panchernikov conceded before expressing confidence in the city’s future and the loyalty of his long-time clientele.
“New York is a little sleepy right now, but we’re here for the long game,” Panchernikov said. “We’ve been through 9/11 and the recession. Now, our clients are blowing up our phone — are you opening on Sept. 30? Which, of course, we are.”
Panchernikov said his local business has been strong throughout the pandemic: “People can’t go out to dine, but our customers have funds” to enjoy its pricey products at home.
The new ground-floor lounge and bar will have 40 seats. It will share the floor with a dedicated retail counter where customers can buy Caviar Russe’s products, including smoked salmon, duck foie gras and truffles, without having to go upstairs to order as they did in the past.