Lower Manhattan Has Strongest Office Leasing Quarter Since 2019
Lower Manhattan’s office market showed significant improvement in the first quarter of 2025, according to the Alliance for Downtown New York’s report on the neighborhood’s real estate market. The resurgence of office leasing comes on the heels of 2024’s historically low levels of activity in this market. The strongest leasing quarter since 2019 was driven by two longtime Lower Manhattan tenants re-committing to the neighborhood and a number of mid- to large-sized deals. While last quarter’s gains in the office sector are encouraging, ongoing macroeconomic uncertainty cautions against drawing definitive conclusions from short-term performance.
Lower Manhattan recorded 1.42 million square feet of new leasing in the first quarter, a number nearly three times greater than the previous quarter and over half of the previous year’s total. The main driver of market activity was Jane Street Capital’s 984,000 sq. ft. renewal and expansion at 250 Vesey St., which is the largest lease signed in Lower Manhattan since the onset of the Covid-19 pandemic. Other large deals for the quarter included Arup Services taking 99,418 sq. ft. of space at 140 Broadway after leaving 77 Water St. and Axsome Therapeutics, which expanded to 96,293 square feet of space at 1 World Trade Center. Also of note, Uber expanded to 44,100 square feet at 3 World Trade Center.
Downtown ended the first quarter with 567,000 square feet of net absorption, the fifth straight quarter of positive absorption. Considering the high leasing total this past quarter, as well as the fact that no new conversion projects were announced, Q1’s positive absorption rate is reflective of increased leasing activity instead of large blocks of office space leaving the market, as has been the case in recent previous quarters.
“After the woes that the office market experienced last year, it is encouraging to see such a robust quarter as the market regains its footing,” Downtown Alliance president Jessica Lappin said. “The opening of Printemps at 1 Wall St. and the continued health of the tourism sector round off a very positive quarter.”
Lower Manhattan welcomed 24 new retail establishments to the neighborhood during the first quarter of 2025. Approximately two thirds of the openings consisted of F&B establishments. The quarter’s new openings are headlined by the arrival of luxury retailer Printemps at 1 Wall St. The long-awaited French shopping, dining and wellness destination, which has experienced lines around the block since opening, spans 55,000 square feet and two floors. Buzzy Mexican restaurant and lounge Gitano opened at Pier 17 at the Seaport. The quarter also saw the opening of NYC favorite chains Ess-a-Bagel at 115 Broadway and Los Tacos No. 1 at 67 Exchange Pl.
For the fifth consecutive year, tourism has risen. The Lower Manhattan tourist count ticked up to 9.3 million in 2024, a 3.3% increase from 2023 and a 29% improvement from 2022. Correspondingly, the neighborhood’s hotels enjoyed another quarter of strong occupancies at 77%, the second highest first quarter occupancy rate on record. Lower Manhattan’s Average Daily Room Rates also posted its highest Q1 on record at $230. The current hotel inventory for the neighborhood stands at 8,534 rooms across 44 hotels.
Read the full report here