The Downtown Alliance has released its analysis of real estate activity in Lower Manhattan for the first quarter of 2017, and most indicators point to a very remunerative place to own property and a rather congested place to live or work.
For those of us who live here, the cost of doing so is climbing steadily. The Alliance report notes that the median rent for Lower Manhattan apartments is now $3,581, up three percent from same period in 2016. This was a heftier increase than in any of the other Manhattan neighborhoods surveyed by real estate consultant Miller Samuel/Douglas Elliman.
People who own apartments are in a much better position than renters if they are selling, and a far worse fix if they are buying. The Alliance report documents that the median sales price for a condominium unit Downtown is $1.6 million — a new record, which also represents a 77 percent spike in just the last five years. (The median price for a condo apartment in the first quarter of 2011 was $902,000.) The average price per square foot for Lower Manhattan condominiums is now $2,135, which constitutes a similarly dramatic jump of 11 percent from the previous quarter and 53 percent from the same period in 2016. All of that noted, there seems to be no shortage of demand for homes Downtown: the Alliance notes that, “there are currently 3,500 units in 26 buildings that are under construction or planned for development.”
In the office market, the three largest leases signed anywhere in New York City during the first three months of this year were all in Lower Manhattan: investment bank RBC Capital Markets decided to keep its home of almost 400,000 square feet in Brookfield Place, music streaming service Spotify took more than 375,000 square feet in Four World Trade Center, and the offices of the New York State Attorney General moved one block, taking almost 350,000 square feet at 28 Liberty Street. In addition to strong demand from the traditional FIRE (finance, insurance, and real estate) sector, and the relative newcomer TAMI (technology, advertising, media, and information) community, Downtown has also lured a third cohort of companies in recent years, the Alliance notes: Nearly one million square feet of space has been leased by fashion and beauty brands, since Revlon planted its flag here in 2014.
“This was a great quarter that reflected the rapidly growing presence of tech and creative companies in Lower Manhattan,” says Downtown Alliance President Jessica Lappin. “If 2015 was about retail and 2016 was about food, then 2017 looks like it’s about music and fashion.” High-end office space in Lower Manhattan now boasts the lowest vacancy rates since 2013, driven in part by bargain hunters: The annual cost for a square foot of office space below Chambers Street now averages $58.50, according to the Alliance report, while Midtown South is fetching $71.50, and Midtown is asking $78.70.
On the retail front, Lower Manhattan now has 1,177 stores and restaurants, 24 of which opened during the first three months of this year. The Alliance report notes that by the end of 2019, the community is expected to have more than 7.28 million square feet of retail space — a growth spurt of some 2.92 million square feet just since 2014.
The restaurant scene continues to grow fabulouser and fabulouser, as Alice Liddell might say. Earlier this year, Blue Ribbon Federal Grill opened in the AKA Wall Street hotel, the Wooly Public debuted in the Woolworth Building, and Kesté (a high-end pizzeria and cooking school that will conduct courses in the arts of making pizza and mozzarella) launched at 77 Fulton Street. Also on the menu: chef Daniel Humm and partner Will Guidara (the team behind Eleven Madison Park — reckoned by some to be the best restaurant in the world) announced they will opening a new eatery on the ground floor Three World Trade Center, while Danny Meyer’s Union Square Hospitality Group unveiled a partnership with Fosun to create a $30 million public restaurant, bar and events space on the 60th floor of 28 Liberty, and former Nomad chef James Kent is reportedly close to a deal to create a restaurant and lounge at both bottom and top floors of 70 Pine Street.
Tourism statistics, which began to look like an invasion more than a decade ago, have now begun to resemble an occupation. The 14.8 million tourists who visited Lower Manhattan in 2016 represent a five percent increase from the previous record, set in 2015. This means, roughly, that the equivalent of 4.6 percent of the population of the United States (or one out of every 22 Americans) walked the streets of Lower Manhattan at some point last year.
The gladdest tidings may be about infrastructure: the modern part of the South Ferry subway station (shuddered since Hurricane Sandy) is slated to reopen in June, and the West Thames Street pedestrian bridge has finally begun construction. Various Lower Manhattan streets (some of them not fully repaved in nearly a century) are either in the midst of reconstruction, or soon expected to begin the process. And the long-promised Performing Arts Center at the World Trade Center is in the early stages of actual development: its planned site is now being cleared.