The building has so frightened Brooklynites that they've christened it "Sauron," after the villain from The Lord of the Rings. This 325-meter, 93-story, all-black steel monolith does stand out from the crowd. The Brooklyn Tower is the only giant skyscraper in New York City not located on the island of Manhattan. And it's not just locals who fear it, but developers too. It is due to be auctioned off on June 10, following one developer's default on its debt.
It's not the only building in trouble since the end of the Covid-19 crisis. American office real estate has been particularly hard hit. According to the latest report from rating agency Moody's, the rate of vacant, unlet space in the US reached almost 20% in the first quarter of 2024, a rate not seen in over 30 years. It's astonishing in a country with a flourishing economy that continues to hire with all its might. In March alone, nearly 303,000 new jobs were created in the country.
'It has to be standardized'
The first rational explanation for this real estate slump lies in interest rates. This has an impact on property loans and rents. But the main reason is something else: Fridays. On that day, offices are empty. Many employees, urged by their employers, have made their way back to open spaces and meeting rooms, but they are still deserted on the last day of the week. According to the Kastle barometer, on average in the 10 biggest US cities, almost 60% of employees are present on the premises. But this figure plummets to 30% on Fridays (Tuesday is the busiest day). Office real estate is a victim of Fridays.
"It's madness," exclaimed businessman Barry Diller on CNBC on April 4, "which is what is going to lead to, I think, sensibly, not necessarily a four-day work week, but four days in the office, and Fridays you can work from home or work at your own schedule. (...) But it has to be standardized." And one way of doing this, at a profit for companies, is to reduce the size of offices. Such a silent revolution owes much to the absence of unemployment, but it has every chance of taking root in society, and not just in the US.