NYC Custodians Prepare To Fight Office Owners For Wage Increases

One thousand janitors who worked in New York City’s commercial buildings during the pandemic will rally in Manhattan this afternoon, as a property services workers union ramps up to negotiations for a new contract with the Realty Advisory Board on Labor Relations.

The RAB’s contract with 32BJ SEIU, which expires on Dec. 31, covers roughly 20,000 workers who clean offices across 1,300 buildings in the city. Both parties are gearing up for the negotiation period, due to start later this fall, for a new contract that covers properties including Hudson Yards, One World Trade Center, One Vanderbilt, Rockefeller Center and the Empire State Building for the following four-year period.

But contract negotiations come at a pivotal moment for many office owners in New York City, who say they are suffering heavy losses amid hybrid work arrangements, declines in leasing activity and owners defaulting on or restructuring loans. Leasing fell below 2020 levels this April, per Colliers data, with owners like SL Green — which owns One Vanderbilt — reporting leasing losses during Q1.

“It is clear that we are now in another moment of significant change as businesses rethink their office needs,” SL Green CEO Marc Holliday said during its Q1 earnings call. Daily occupancy in the REIT’s properties reached just 60% during the quarter.

Denis Johnston, 32BJ SEIU’s executive vice president and director of the union’s New York Metro commercial union, said he understands some of the constraints that owners are facing. But that doesn’t mean demands on workers have shifted compared to before the pandemic: They are still tasked with everything from emptying trash, dusting and wiping surfaces to cleaning bathrooms, buffing and stripping floors.

“Fundamentally, our workers are the frontline people who keep these buildings safe in terms of the cleaning and disinfecting work that goes on,” Johnston said.

Some of the commercial vacancies and lower revenues are also leading owners to request higher productivity from janitors at the same wage, according to Johnston.

“The building owners have already increased the expectations for the amount of work as a cost-cutting measure,” he said.

Two marches are scheduled in Manhattan for the afternoon of June 15, one traveling north along Sixth Avenue from Herald Square and the second traveling south from 1251 Sixth Ave. Both marches end in Bryant Park, where 32BJ SEIU is hosting a rally shortly after 3 p.m.

Workers are asking for pay increases that align with inflation and improvements to health insurance and pensions, citing the increased cost of living and factors like skyrocketing rents in New York City. Under the present contract, wage increases are roughly 2.5% to 3% per year, Johnston said, well below soaring inflation and living costs that have plagued workers for the last two years.

Many cleaning workers made huge sacrifices during the pandemic, which killed roughly 50 32BJ SEIU members, Johnston said. Those that were employed were given split shifts on alternating weeks so that Covid-19 would be limited to half the workforce at a time. 

Others members didn’t have work during that period. Yenny Hernandez, a 32BJ SEIU member who had been cleaning offices since 2008 when he was 15, ended up relying on food banks in the Bronx when she was laid off in the early days of the pandemic.

She had been working as a cleaner at 979 Third Ave., which is owned by Decorative & Design Building Co. and houses the Decorative & Design Center of New York.

“I was barely able to pay my bills,” she said in a statement to Bisnow. “We keep this city running and people should know all we have gone through for this city.”

Hernandez said she applied for food stamps, but never got any. She lost her health insurance and went on unemployment — which only lasted a few months, expiring in November 2020 — and only got her job back in May 2022. Low-paying, part-time jobs cleaning houses helped keep her afloat in that period.

Hernandez said she is hoping a new contract will reward workers for the losses they swallowed during the pandemic.

“It was two years of uncertainty,” she said. “The whole time I was waiting to get a call back to come back to work. I had given up hope, but in [March] 2022 I finally got my union job back!”

Office owners have had difficulties of their own for the last three years. 

Office usage levels broke the 50% barrier last week for the first time since the pandemic began, Bloomberg reported. At least 15M SF of office space in NYC is underwater, spread across 73 properties, including Class-A and trophy buildings, according to JLL. One in four buildings are worth less than they were last time they sold — with older office properties now selling for 50% less than their last purchase price, in some cases — wiping $10.6B of value from the city’s office market.

Others are struggling with refinancing deals. L&L Holding Co. and Mitsubishi Corp. defaulted on a $93M loan on a Plaza District office tower in April, leaving the lender scrambling for an exit. RXR defaulted on a $240M loan for its 790K SF office tower at 61 Broadway in late May, while this month Pacific Oak and Savanna said they were working to restructure a debt arrangement for a 640K SF office property in the Financial District.

32BJ SEIU said in a release that its members are conscious of the obstacles faced by owners, and the office market’s troubles have already cost the union 2,000 jobs.

If the two sides cannot agree to a new contract, the union intends to strike, but Johnston said he is hopeful for a deal long before it comes to that.

“It's important to emphasize the mature relationship and the partnership that we've had with the building owners, the real estate industry in New York City,” he said. “I wouldn't want to speculate right now, but we will need to be prepared for a strike if there are give-back demands on the table coming from the real estate industry.”