2025 Lower Manhattan Real Estate Year in Review

The Alliance for Downtown New York’s quarterly report provides data on commercial office, retail, residential, hospitality and development projects from Q4 2025. Major findings include:  

1.57 Million Sq. Ft. of Q4 Leasing Drives Yearly Total to 4.75 Million, Most Active Year Since 2019

A powerful fourth quarter pushed the annual leasing total to its highest level since the onset of the pandemic. Transaction activity in 2025 was more than double that of 2024, reflecting a significant return of demand from major firms like Moody’s and BNY Mellon. Relocation activity also surged, increasing fivefold compared to the previous year.

Positive Net Absorption and Vacancy Decline for Eight Straight Quarters

Lower Manhattan recorded a net 821,000 sq. ft. of positive absorption in Q4, bringing the annual total to 2.02 million sq. ft.—the first time absorption has exceeded 2 million in 25 years. Overall vacancy fell to 22.2%, marking eight quarters of continuous decline. Class A vacancy also improved, ending the year at 21.1%.

Hospitality Sector Breaks Records With Highest Room Rates and Occupancy to Date

The district’s hotel market set all-time records in Q4, with Average Daily Room Rates (ADR) reaching $384.93. Occupancy rates also hit a record high of 90% during the final quarter. This sustained growth was consistent throughout 2025, with new quarterly ADR records established in every single quarter.

Retail Openings Increase by 38% as Residential Population Tops 70,000 Milestone

Lower Manhattan’s resident population surpassed 70,000 for the first time, fueled by a boom in office-to-residential conversions. This growing community supported 90 new retail openings in 2025, including high-profile additions like Printemps and Fogo de Chão. Median monthly residential rents also reached a new record of $5,000.

Read the report below, or download a PDF.