Lower Manhattan Real Estate Year in Review 2022

The Alliance for Downtown New York’s annual year-in-review report provides data on commercial office, retail, residential, hospitality and development projects from 2022. Major findings include:  

Office Leasing Improves, But Vacancies Mount

The past year saw a recovery in leasing activity — 12% higher than in 2021 and 38% above the record low set in 2020. Nonetheless, leasing in Lower Manhattan was still 29% below the five-year annual average. Office vacancies continued to mount with direct and sublet spaces being added to the market, reaching their highest level on record. Class A towers drove office leasing, as the flight-to-quality trend continued, i.e. tenants upgrading to better located buildings with strong amenities and updated building systems.

Residential Market Rebounds

The strength of the Lower Manhattan market persisted in 2022, as median rents broke record highs multiple times throughout the year, signifying a strong demand to live in the neighborhood. On the sales front, rising interest rates limited activity, causing sales volume to fall one-third below 2021 levels.

Retail Openings Surpass Pre-Pandemic Levels

The pace of retail openings exceeded pre-pandemic levels, with over 150 retailers opening in 2022. Several large, critically-acclaimed major retail anchors opened, including the Tin Building by Jean-Georges, Hall des Lumières, and Urbanspace food hall. Unfortunately, many retailers thought to have closed temporarily during the pandemic closed permanently in 2022, roughly  on par with the number to shutter in 2020.

Hospitality and Tourism Market Rebounds

The near-universal lifting of travel restrictions and Covid-related entry requirements in 2022 helped boost visitorship to the city. Tourism numbers recovered significantly in 2022, as leisure and business travel has started to rebound.  Three new hotels opened in 2022, and hotel-room inventory is now higher than in 2019.