As the country starts lifting stay-at-home mandates and people head back to the office, Citigroup is considering a temporary relocation to the suburbs until it’s safe to return to Manhattan, according to a Bloomberg report on Wednesday (May 20) that cited sources familiar with the matter.
The post-pandemic world will require social distancing and face masks for an undetermined amount of time, something that is easier to do if people can commute in their own cars to open spaces.
The country’s third-largest bank is said to be looking into leasing furnished office space on a short-term basis, possibly in New Jersey, Long Island or Westchester County.
Citigroup is not alone in its consideration. Other financial firms have been talking to RXR Realty in Manhattan to ask about their buildings in Long Island and Westchester, a person familiar with the matter told Bloomberg.
Brandon Huffman, a principal at Rubenstein Partners, said there have been inquiries on “several hundred thousand square feet” of office space for companies headquartered in New York. The Philadelphia-based private real estate investment management firm owns buildings in northern New Jersey as well as in Stamford, Connecticut.
“There’s an overwhelming number of employees that need mass transit to access the urban environment,” Huffman said. “Nobody knows how that’s going to work in a social-distancing world.”
There has been a spike in interest for suburban office space, according to real estate brokers and landlords. Inquiries have come from media companies, law offices and technology firms.
Over the past several years, bigger corporates like Goldman Sachs and Deutsche Bank have moved some of their operations out of New York City to save money on overhead. Goldman went to Salt Lake City, Utah in 2000, and Deutsche Bank opened offices in Jacksonville, Florida.
James Gorman, CEO at Morgan Stanley, said in April that he was envisioning a future with “much less real estate.”
A Harris Poll of 2,050 U.S. adults surveyed from April 25-27 indicated that 39 percent of city residents said the coronavirus pandemic has them thinking about relocating to less crowded places.