2023 Lower Manhattan Real Estate Year in Review

2023 Lower Manhattan Real Estate Year in Review

The Alliance for Downtown New York’s annual year-in-review report provides data on commercial office, retail, residential, hospitality and development projects from 2023. Major findings include:  

Office Leasing Declines as Legacy Industries Anchor Market Activity and Vacancy Rates Stabilize

2.8 million sq. ft. of office space was leased, downtown’s lowest leasing total in the post-pandemic era.  The government sector anchored downtown leasing and was responsible for 37% of 2023’s activity. The year end total was 9.1% below 2022 and 22% below the five-year average. Vacancy rates, though slightly down from the record setting Q2, remain stubbornly high.

Residential Rents Rise

Median rents reached record highs in 2023, ending the year at $4,612 — the third highest rent in Lower Manhattan’s history. As rent prices grew, however, sales price and volume shrunk, as high interest rates have made buying a less viable option.

Retail Offerings Expand

A growing array of locations has diversified Lower Manhattan’s dining options: Sixpoint Brewery, Lawn Club and Metropolis by Marcus Samuelsson all debuted in 2023, while longtime neighborhood staple Delmonico’s reopened. 79 retail shops opened while 42 closed over the course of 2023. 

Hospitality and Tourism Market Continue Their Resurgence

Room rates reached a historic high of $345.45. Hotel occupancy also improved markedly since the pandemic, reaching a rate of 85% — very close to 2019’s Q4 rate and outperforming the city wide average by 3 percentage points.