Residential Demand Continues to Lead Lower Manhattan Real Estate Activity
Lower Manhattan marked its the third consecutive quarter with highs in residential rents while office space had its second strongest quarterly leasing total since the beginning of the COVID-19 but remained below the the five-year quarterly leasing average, according to the Alliance for Downtown New York’s Q1 2022 Lower Manhattan Real Estate Report.
On the residential front, the median rent in Lower Manhattan rose to a high of $4,400, up nearly 5% from the previous quarter and 47% (or $1,400) from the lows seen in the first quarter of 2021 during pre-vaccine days of the pandemic.
In office leasing activity, the first quarter saw Lower Manhattan record 884,000 sq. ft. of space leased — the second highest quarterly total since the beginning of the pandemic. While activity continues to improve and is nearly double the square footage leased a year ago, leasing remains 21% lower than the five-year quarterly leasing average, with rents trending downward as vacancies grow, particularly in Class B office buildings.
“Despite slow gains in the office sector, availability of space and competitive pricing has positioned Lower Manhattan to be a great deal for companies looking to grow, or establish their base, in New York City” said Jessica Lappin, President of the Alliance for Downtown New York. “We’re simultaneously seeing historic demand for residential space in Lower Manhattan and a flurry of new store openings, demonstrating that there continues to be strong desire to be in the neighborhood.”
So far this year, Lower Manhattan has welcomed 35 new retailers, including Blue Ribbon Sushi Bar, Kim’s Video, QC Ny Spa on Governor’s Island and ZAZA Diner. Additionally, a number of businesses thought to have permanently closed reopened their doors to guests including Manhatta, which sits at the top of 28 Liberty Plaza.
Read the full Q1 2022 Lower Manhattan Real Estate Report.