Ominous outlook for Manhattan office space can't be good for Site 5, catercorner to arena and long-planned for big complex.

A front-page article in today's New York Times, headlined "Office Market In Dire Straits In Manhattan (and online as A Bleak Outlook for Manhattan’s Office Space May Signal a Bigger Problem) has to be sobering to Atlantic Yards/Pacific Park developer Greenland Forest City Partners, dominated by Greenland USA.

The twin hammers of remote work and rising interest rates make office buildings, especially older ones, less attractive to tenants in Manhattan.

That could lead to a city budget crisis and--more parochially--make it far less likely that new office space, at least in the near term, will be needed. After all, Vornado has put its big plan for office towers around Penn Station on hold.

And in Brooklyn

For Greenland, the question is what to do with Site 5, the parcel catercorner to the arena that for years housed the big-box stores Modell's (now closed) and P.C. Richard.

Greenland Forest City in 2015-16 started floating plans to move the unbuilt bulk of the B1 tower (aka "Miss Brooklyn"), once slated to loom over the arena, across Flatbush Avenue to Site 5.

Plan for Site 5 project floated in 2016

Site 5 has already been approved for a significant, 250-foot, 440,000 square foot tower. However, the more recent plans envisioned a two-tower project with more than 1.1 million square feet. But that requires a public process and a vote by the gubernatorially controlled Empire State Development.

The 2016 scenario envisioned residential, commercial, and hotel space, plus retail. Later, the state pitched the site for the Amazon HQ2 office complex.

As I've written, what was once promoted as an iconic office tower might, in the time of work from home, be reconfigured--or not.

But even a new residential tower, adjusted to provide WFH spaces and negotiated to include affordable units, faces the major headwinds of high interest rates and the absence of a successor to the state's 421-a tax break.