Will offices be the same? The Empire State Building offers clues

New York City’s Empire State Building has been a symbol of America’s economic might for almost 90 years.

But today, it’s also symbol of how the country is struggling to adjust to a new, more restrictive way of life.

The 102-story art deco skyscraper is home to numerous businesses – including LinkedIn and Expedia - and a famed tourist magnet for its observation deck.

That won’t welcome visitors until next month, but Phase 2 of the city’s reopening does allow for some office tenants to trickle back in – where they will face a new normal.

“We will have business as usual, in an unusual way.”

Anthony Malkin is Chairman, President and CEO of Empire State Realty Trust, which owns and manages the building. He told Reuters those returning are not only required to have their own masks and hand sanitizer – as well as get their temperatures checked at the door – but also to be prepared to face the walls once inside the elevators.

“When they get to the elevators, there are decals on the floor. They tell you not only where to stand, but in what direction to stand. So we have in our elevators, the instruction is face the wall. Why? So you’re not breathing towards the center.”

How many companies will return to the building still remains to be seen.

Most, like LinkedIn and luxury watch brand Bulova, have opted to extend work-from-home arrangements.

Global Brands Group - which owns Calvin Klein, among other brands - signed a 15-year lease for six floors of office space in 2011 but has already told employees they will never be required to come back to the office.

And this month, beauty products company Coty signed over 50,000 square feet of its Empire State Building office space to LinkedIn.

Based on a tenant poll, management expected just 15% to 20% of the building's usual 15,000 worker population to return during Phase 2, which could spell trouble for building ownership and other commercial real estate companies across the city and beyond.

But some tenants are digging in.

Creative content platform Shutterstock, which signed an 11-year lease in 2013 for 85,000 square feet of Empire State Building space, said it’s following authorities’ guidelines about how and when to return.

The biggest question mark, however, may the building’s observatories and accompanying exhibits, with summer tourism plunging and new restrictions for visitors.

“Everyone will wear a mask. Some of the exhibits will be closed. You can look at them but you can’t touch them, because they would otherwise require high touch. Another interesting thing is that everything is in one direction. So you’re never coming back to face somebody, you’re always going toward the destination, which is the observatory deck.”

The observatory raked in over $125 million in revenue in 2019 - more than a fifth of management’s total revenue for the year.