Lower Manhattan Real Estate Overview, Q2 2025

The Alliance for Downtown New York’s quarterly report provides data on commercial office, retail, residential, hospitality and development projects from Q2 2025. Major findings include: 

Downtown Leasing Activity Shows Year-Over-Year Improvement by Finishing at 772,000 sq. ft., District Records Sixth Straight Quarter of Positive Absorption 

Downtown leasing in Q2 was 31% above the Q2 2024 total and 12% higher than the five-year average. Year-to-date leasing is now 2.23 million sq. ft., 87% greater than the first two quarters of 2024. Downtown also recorded its sixth straight quarter of positive absorption, with the Q2 total ending at 89,000 sq. ft. The largest deal of the quarter came from an unnamed financial services tenant, which inked a 193,000 sq. ft. deal at 1 World Trade Center.

Overall Office Vacancy Declines for Sixth Consecutive Quarter, Asking Rents Tick Up Over the Quarter and Year 

Although vacancy rates are still high across the Manhattan office markets, Lower Manhattan has shown sustained improvements for six quarters in a row. It ended Q2 at 22.8%, marking a 1.8% drop over the year — the greatest annual decrease since 2015. Asking rents, which have been in decline since 2020, increased over the quarter by 2.1%, a growth rate not seen since 2018. The overall rate currently stands at $56.18. Class A asking rents increased as well, finishing the quarter at $59.17.

Average Daily Room Rates (ADR) Hit New Q2 Record, Occupancy Only 1% of Shy of Nine-Year Quarterly Record 

Lower Manhattan’s hospitality sector enjoyed another successful Q2 by finishing with a $334 ADR and an 88% occupancy rate. Not only is this the highest Q2 ADR since the Alliance started recording these figures in 2016, but also the third highest ADR on record. Occupancy, which was 1% shy of its own record, increased 11% over the quarter. 

23 Retailers Opened in the Second Quarter, Including the Much-Anticipated Fogo de Chão at 3 World Trade Center 

The retail market has shown signs of improvement over Q1 and Q2, which have seen 24 and 23 openings, respectively. For reference, the first two quarters of 2024 only saw 29 openings. Fogo de Chão is a particularly notable opening, which features an open churrasco grill, wine displays, on-site dry-aging meat lockers, and a vibrant indoor bar. As the first and only Brazilian steakhouse in the district, the restaurant adds to the neighborhood’s reputable steakhouse collection.

Read the report below, or download a PDF.