Lower Manhattan Real Estate Overview, Q1 2026

The Alliance for Downtown New York’s quarterly report provides data on commercial office, retail, residential, hospitality and development projects from Q1 2025. Major findings include:  

908,000 Sq. Ft. of Q1 Leasing Outperforms Five-Year Quarterly Average Despite Pullback From Record 2025

Lower Manhattan’s office market opened 2026 with 908,000 sq. ft. of new leasing, a 42% decline over the quarter and 36% below Q1 2025’s strong totals. Even so, Q1 leasing finished 12% above the five-year quarterly average and represented the second highest Q1 total since the onset of the pandemic. Small-to-midsize leases drove most of the quarter’s activity, led by SHoP Architects’ 56,196 sq. ft. expansion at 233 Broadway.

Vacancy Ticks Up Marginally After Eight Consecutive Quarters of Improvement

Downtown’s overall vacancy rate edged up 0.1% over the quarter to 22.3%, ending a streak of eight straight quarters of decline. Despite this slight uptick, the rate remains the second lowest quarter-end figure since Q2 2022. Overall asking rents continued to climb, with the district’s overall rent reaching $56.67 — a 3% year-over-year increase and the highest recorded figure since 2022 — while Class A rents rose 4.4% year-over-year to $61.77.

Hotels Set All-Time Q1 Records for Room Rates and Occupancy Ahead of FIFA World Cup 26™ and America250

Lower Manhattan’s hotel market posted its highest-ever first quarter Average Daily Room Rate (ADR) of $332, a 44% increase over last year’s previous Q1 record. Occupancy also reached a Q1 record of 86%, 9% above last year and 27% above 2019. The district is poised to welcome an influx of visitors this spring and summer for the  FIFA World Cup 26™ and America250 celebrations.

Read the report below, or download a PDF.