Lower Manhattan Real Estate Overview, Q1 2023

Lower Manhattan Real Estate Overview, Q1 2023

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

Commercial Leasing Activity Struggles, And Office Vacancy Remains High

The first quarter saw 500,000 sq. ft. of office leasing in Lower Manhattan — the lowest quarterly total in two years, and 51% below the five-year quarterly average. Vacancies remained high amid sluggish leasing activity, but rents grew slightly as more expensive space came onto the market in the World Trade submarket.

Median Apartment Rents Begin to Fall

Median rents dipped to $4,225 after hitting a record high  of $4,634 at the end of 2022. Median rents are still 6% higher than they were before the pandemic.  Leasing discounts increased  for the first time in a year, and available units sat on the market an average of 22 days longer than in the previous quarter, suggesting that rents may have reached a plateau in the higher end of the market.

New Retail Openings Expand Lower Manhattan’s Offerings

14 retailers opened so far this year, including Whole Foods at One Wall Street and Galerie bar and lounge at the Smyth Hotel. An additional 16 retailers announced plans to open soon. Century 21 and Delmonicos are poised to reopen after closing during the pandemic.

Tourism Begins To Rebound

Lower Manhattan welcomed 7.4 million tourists and 12.1 million total unique visitors in 2022 as domestic travel resumed and international travel restrictions were lifted. Forecasts expect domestic travel to exceed pre-pandemic levels later this year. The proportion of international visitors nearly doubled to 55% from 28% in 2021. Two new hotels opened, and the former Mr. C Seaport was rebranded as the 33 Seaport Hotel.