Lower Manhattan Real Estate Overview, Q3 2022
The Alliance for Downtown New York’s third quarter report provides data on commercial office, retail, residential, hospitality and development projects. Major findings include:
Commercial Leasing Picks Up While Office Availability Continues to Grow
The third quarter saw Lower Manhattan record 851,000 sq. ft. of office leasing. Leasing activity increased 40% over the second quarter, representing Lower Manhattan’s third best quarter since the start of the pandemic. That good news is offset by other indicators that represent a mixed picture overall. Lower Manhattan’s recovery continues to lag behind the other Manhattan office markets. While leasing in Midtown and Midtown South was sufficiently robust to surpass their five-year quarterly leasing averages, leasing in Lower Manhattan is still significantly below the five-year average. Vacancy rates remained stubbornly high in all three Manhattan office markets, which were over 20% for the second quarter in a row.
Median Apartment Sales Dip Below $1 Million as Median Rents Reach New High
The median rent in Lower Manhattan rose to a record high of $4,500, up over 12% from last quarter. The sales market cooled considerably in the third quarter, as median sales price was impacted by increased interest rates. The median sales price for co-ops and condos in Lower Manhattan fell to $999,000, down over 37% year-over-year.
Retail Continues to Rebound
Lower Manhattan continued to enjoy steady momentum in the retail market and is now home to as many retailers as in 2019. Roughly half of the 34 new openings were food and beverage businesses, including the Tin Building by Jean-Georges. Another major opening, the immersive digital art experience Hall des Lumières, debuted at the landmarked former Emigrant Savings Bank at 49 Chambers Street. This quarter, French luxury department store Printemps announced it will open its first US location at One Wall Street.
Tourism and Hotel Occupancy Continue to Pick Up
Hotel occupancy has improved markedly over the last year as business and leisure travel resume in New York, noticeably among traditional western European and Canadian markets. The Radisson Wall Street reopened as a hotel after serving as a homeless shelter.