More Turbulence Expected for NYC's Real Estate Market in 2023

According to the New York City Independent Budget Office, a slowdown in economic activity, rising interest rates, and remote work will continue the decline of office leasing. These factors are expected to lead to real estate sales falling 15.9 percent between fiscal years 2022 and 2023. Sweeting stated that hybrid will become the new norm and the property's value will drop because people won't pay the same rents they paid five days a weeks when they used the space. There will be adjustments if you have less space or don't use it as often as you would like. According to the report by the comptroller, younger tech companies, which were able to buoy Manhattan's office markets in the first 18 month of the pandemic's onset, will not save them this time. Job losses and hiring freezes that are likely to continue next fiscal year will curtail leasing in the sector. The IBO discovered that large commercial tenants are unlikely to end their leases before the pandemic. This is because the revenue from commercial rent taxes has remained strong throughout the crisis and is expected to rise by 2.7 percent to $900 millions between fiscal years 2022 and 2023. Sweeting stated that there has not been an increase in commercial property delinquency. "That is an indication that the primary tenant may have placed the space on sublease. IBO forecasts that hotel occupancy tax revenue will reach $514 million in 2023 fiscal year. This is a 49 percent increase on the revenue from 2022 fiscal year. Celia Young can reached at EMAIL