Explained: Why the Empire State Building may never be the same

The Empire State Building, like the city it inhabits, relies on a steady stream of tourists, thriving retail businesses and companies willing to lease its vast amount of office space. The coronavirus pandemic emptied out the attractions, shops and offices, in both the building and the city, for months. Now, as a promised return to normal has once again been put on hold, the plans being made by the building’s occupants reveal a meaningful cultural shift.
 
The observatory: Like other tourist attractions around New York City, the famous observatories on the Empire State Building’s 86th and 102nd floors sat nearly empty for months. In the second quarter of 2019, nearly a million people visited the observatory. In the second quarter of 2021, the observatory had 162,000 visitors — an improvement over the first quarter, but still 83 percent below the same period in 2019. The observatory’s predicament un­derscores the collapse of tourism in New York City, which had an estim­a­ted 45 million fewer visitors in 2020 than the year before, depriving the city of over $30 billion in spending.

 
The offices: Most of the Empire State Building is dedicated to office space. With its mix of big and small businesses, the building is perhaps a better barometer of the state of office space in New York and the city’s economy than the towers dominated by global firms.
 

But 48 tenants, who represent nearly half of the building’s office space, shared their plans for returning to the office or announced them publicly. Tenants who represent 41 per cent of the building’s office space said when they return, they will em­brace a hybrid work model, in which employees have the option to work remotely at least part of the time.

 
All of the tenants who said they left the building, or plan to, were in leases or sublet agreements that happened to end during the pandemic or will end soon.
 
Michael Feldschuh, the chief executive of Daxor, a medical equipment company that had been in the building since 1990, said employees began working from home in March 2020 and never returned. When its lease expired in the summer of 2021, Daxor chose to end it.
 
“We’ve found ourselves being able to work in ways that we couldn’t imagine were possible before,” Feldschuh said. “We just thought for so long we needed an office to be efficient, and that’s not true.”

 
Very few tenants who had leases that were expiring during the pand­emic said they decided to renew them. One was the Allen C Schne­i­der & Co accounting firm, which rents a suite on the 31st floor. Ira Lip­pel, a managing partner at the firm, said the building’s management offered them incentives to stay.