Lower Manhattan Experienced Weak Year of Office Leasing in 2024 Even as Positive Absorption Grew

Lower Manhattan’s office market struggled in 2024, according to the Alliance for Downtown New York’s year-in-review report on the neighborhood’s real estate market. Marked by the lowest leasing year in recent memory and limited relocation activity, the market did not see the same leasing improvements made by Manhattan’s other submarkets in 2024. 

The district ended the year with its fourth consecutive quarter of positive absorption, which can largely be attributed to underperforming office properties leaving the market to be converted to residential. In total, the neighborhood logged over 3 million square feet of positive absorption for the year, suggesting that the supply of office space is becoming better aligned with demand while offsetting some leasing woes.

Lower Manhattan recorded 388,000 square feet of new leasing in the fourth quarter and totaled 2.24 million square feet for the calendar year. This total marked a 21% decrease from 2023’s sum and represents the lowest yearly total on record. Office vacancy did show signs of stabilization in 2024, however, with the fourth quarter marking the third consecutive quarter of modest declines. The largest leases of the year included financial services company Stripe, which signed a 147,509 sq. ft. lease at 28 Liberty St.; ticketing giant StubHub, which signed a 103,188 sq. ft. lease at 4 World Trade Center; and Success Academy Charter Schools, which signed a 93,937 sq. ft. renewal at 120 Wall St. 

The hospitality and tourism sectors, however, capped a strong year as tourists filled Lower Manhattan’s streets and demand surged at its hotels, which experienced record high room rates and occupancy returning to pre-pandemic numbers. The retail market also saw openings outpace closings for the year, with many new and diverse dining experiences reinforcing the neighborhood’s reputation as a foodie destination. 

“Lower Manhattan’s office market continues to face some real challenges,” Downtown Alliance president Jessica Lappin said. “However, it is worth celebrating the gains made by our tourism and hospitality sectors, which remain a bright spot.”

Lower Manhattan logged 65 retail openings in 2024 compared to 25 closings. Many of the new openings were food and beverage establishments. Highlights range from the Art Deco cafe Conwell Coffee Hall at 6 Hanover St. to the high-end Cantonese restaurant Yao NYC at 213 Pearl St. to Peck Slip Social, a bar and social space at 36 Peck Slip. 2024 also saw the opening of “Life and Trust” at 69 Beaver St. The immersive and interactive theater experience from the team behind the popular “Sleep No More” show spans six floors and 100,000 square feet.

Meanwhile, hotel and tourism numbers continued to show strength for the year. Lower Manhattan saw hotel occupancy rates reach 88% in Q4, equaling 2019’s Q4 rate, the quarter’s highest mark on record. The neighborhood also ended the year with the highest average daily room rate on record at $363.16. The hotel inventory in Lower Manhattan currently stands at 8,498 rooms across 43 hotels, including two that opened in 2024. The Warren Street Hotel opened at 86 Warren St. while Tribeca Hotel FiDi opened at 102 Greenwich St. 

Read the full report here.