Residential Demand Outpaces Commercial Leasing in Lower Manhattan
While the city continues its gradual recovery from the impacts of COVID-19, Lower Manhattan witnessed a record-high demand in the residential sector and continued growth in retail, but had less activity across the office-leasing market, according to the Alliance for Downtown New York’s 2021 Lower Manhattan Real Estate Market Year In Review.
“The full economic impacts of Covid-19 are still revealing themselves,” said Jessica Lappin, President of the Alliance for Downtown New York. “There were some bright spots last year, with some increase in commercial activity and record-high residential rents. We are hopeful this signals even brighter days ahead.”
Read the full 2021 Lower Manhattan Real Estate Market Year In Review report.
According to the 2020 Census, Lower Manhattan is the fourth-fastest growing neighborhood in New York City and the fastest growing in Manhattan. With a population of nearly 61,000, the year 2021 saw strong demand for living in the neighborhood. Median rents set new record highs, which reversed all pandemic setbacks. On the sales front, more than 520 units were sold this past year — nearly double the sales from 2019.
Lower Manhattan logged 2.78 million sq. ft. of leasing in 2021, a 24% increase than the record-low set in 2020 but still the second-lowest annual total over the past decade. Leasing activity was strongest in Class A towers with employers choosing buildings with strong amenities and updated building systems.
While retail and hospitality businesses in Lower Manhattan were hit hard in 2020 by the initial shutdown, 2021 saw a returned pace of openings and slowed closures. Nearly 100 new retailers opened in 2021, including Alamo Drafthouse and several full-service dining restaurants. Additionally, eight Lower Manhattan hotels have been repositioned to new uses, reopened under new ownership and/or reflagged with new hotel brands.