Lower Manhattan Real Estate Overview, Q3 2025

The Alliance for Downtown New York’s quarterly report provides data on commercial office, retail, residential, hospitality and development projects from Q3 2025. Major findings include:  

990,000 sq. ft. of Leasing Activity Represents Increases Over the Quarter and Year, District Sees Positive Absorption for Seventh Straight Quarter 

Leasing activity reached 990,000 sq. ft. in Q3, up 28% from last quarter and 45% year-over-year, and 39% above the five-year average. Net absorption totaled 554,000 sq. ft., marking seven consecutive quarters of positive absorption. Unlike in prior years, where gains were driven by residential conversions, Q3’s strong absorption reflects growing demand for office space.

Overall Office Vacancy Declines for Seventh Consecutive Quarter, Increasing Office Rents Yet Another Indicator of Increased Demand

Overall vacancy fell to 22.5% in Q3, marking seven consecutive quarters of decline. Class A vacancy improved to 21.3%, down 2.5% year-over-year — the largest annual drop since 2013. Meanwhile, office rents rose for the second straight quarter to $56.40 per sq. ft., with Class A rents climbing 4.4% year-over-year to $61.28.

Hospitality Sector Enjoys High Average Daily Room (ADR) and Occupancy Rates

Lower Manhattan’s ADR reached a new Q3 record of $330, up 9% year-over-year and 30% greater than the Q3 2019 value. It marked the second time the district’s ADR has surpassed $300, with new quarterly records set in every quarter of 2025. Occupancy also remained strong, holding steady at 88% for back-to-back quarters — the second highest rate on record since 2016.

28 Retailers Opened in the Third Quarter, YTD Openings Greatly Exceed 2024

With 28 retail openings in the third quarter, YTD openings are now at 75 — 60% greater than last year. Notable openings include Barcade at 10 Cortlandt St. and Socceroof, a soccer complex converted from office space, at 28 Liberty St.

Read the report below, or download a PDF.