Lower Manhattan 2021 Real Estate Year in Review

2021 LOWER MANHATTAN REAL ESTATE YEAR IN REVIEW

Lower Manhattan Real Estate Year in Review | 2021

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2021

LOWER MANHATTAN REAL ESTATE YEAR IN REVIEW EXECUTIVE SUMMARY Two years ago this March, the COVID-19 virus reached American shores and wreaked havoc on Lower Manhattan’s booming economy. As offices emptied and New Yorkers stayed home, the impact on Lower Manhattan’s vibrant business district was dramatic.

Over the course of the last year, the widespread adoption of highly effective vaccines has offered renewed hope; and the seeds of a recovery, though still fragile, have been sown. Retailers and eateries that shuttered in the darkest days of 2020 have begun to reopen, while entrepreneurs have taken advantage of a favorable market to set down new roots in the district. Visitors have slowly begun returning to Lower Manhattan and many hotels have reopened.

Contrary to widely discussed fears of an exodus of residents from dense urban areas, Lower Manhattan’s residential market has performed strongly with rents reaching record highs.

Significant challenges, of course, still remain. The pandemic is far from over and the Omicron-driven surge in cases late in 2021 has shaken confidence.

While office leasing improved every quarter in 2021, vacancies remain high and overall leasing is still well below the five-year average. Additionally, return-towork plans were upended in December across the private sector. As of this writing, however, the latest wave of infections appears to have crested and there is reason to be hopeful for a more consistent recovery through 2022.

Lower Manhattan Real Estate Year in Review | 2021

Office Leasing Improves, But Vacancies Mount 2021 saw a recovery in leasing activity — 24% higher than the record low set in 2020. However, leasing in Lower Manhattan was still the second lowest annual total over the past decade. Office vacancies continued to mount with direct and sublet spaces being added to the market, reaching their highest level in decades.

The flight to quality trend in office leasing saw notable activity in new or significantly repositioned office buildings. Better located buildings with strong amenities and updated building systems were heavily favored. Vacancies in older office buildings should be anticipated to rise, as office tenants continue downsizing and/or relocate to modern, wellamentized office buildings. Asking rents continue inching downward, however larger rent declines are being seen during negotiations in lower taking rents and/or increases in tenant concessions.

The evolving nature of COVID-19 variants has made the return to office movement murky, further challenging commercial real estate decision making.

Now, many business leaders are taking a more nuanced approach to workspace strategies, avoiding specific return dates and recognizing that flexibility and adaptability in the age of COVID-19 is the wisest course of action.

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Retail and Hospitality Sectors Recover And Reimagine Themselves The pace of retail openings returned to pre-pandemic levels, with nearly 100 retailers opening in 2021. A number of new full-service dining options opened, while the long-anticipated Alamo Drafthouse movie theater debuted. Furthermore, businesses that were thought to be permanently shuttered because of the pandemic, reopened or announced plans to reopen.

The number of retail closures slowed significantly, leading to believe that while retail businesses continue to be forced to evolve to the ongoing pandemic, permanent closures as a result have dissipated. Looking to 2022, notable future openings of Whole Foods, Urbanspace food hall and two permanent immersive art and theater spaces signified the long term bet on the market’s fundamentals.

Hotels in Lower Manhattan also continue to evolve.

Over the past two years, there have been eight hotel closures in Lower Manhattan; however, the properties have not remained vacant. All have been repositioned to new uses, reopened under new ownership and/ or reflagged with new hotel brands. In fact since the pandemic began, Lower Manhattan has seen the number of hotel rooms remain steady, despite the tumultuous market. Notable hotel openings this past year include Casa Cipriani and a dual Courtyard/ Residence Inn hotel. Though citywide and Lower Manhattan hotel performance metrics remain below pre-pandemic levels, positive momentum continued over the past year as tourism and business travel started to rebound.

Residential Market Rebounds The expectation of return-to-work mandates, an influx of professionals and college students returning to the city, and widespread expiration of pandemicdiscounted leases caused demand for new rentals to soar. The strength of the dense, urban Lower

Lower Manhattan Real Estate Year in Review | 2021

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Manhattan market became evident in the second half of 2021, as median rents went from record lows to record highs. While tenants might not celebrate record high rents, the increased rents signify strong demand for the neighborhood. On the sales front, buyers sought to take advantage of increased savings and near-record low interest rates, as over 520 units were sold in 2021 — nearly double the sales from 2019.

The release of the 2020 Census reported that Lower Manhattan’s population rose to nearly 61,000 — 33% higher than in 2010 and a massive four-fold increase from 2000. With a steady pace of new residential construction and office building conversions, Lower Manhattan was the 4th fastest growing neighborhood in New York City and the fastest growing in Manhattan.

Infrastructure And Open Space Continue to be a Focus Lower Manhattan saw alternative transportation infrastructure continue to be developed. New bicycle infrastructure was introduced, including a dedicated cycling lane on the Brooklyn Bridge and expanded capacity of CitiBike stations. The NYC Ferry, with a hub at Pier 11-Wall Street, added new routes and expanded deeper ito the outer boroughs.

The Battery unveiled a new playground, while Governors Island announced it would now be open year-round. Furthermore, Governors Island was approved for a rezoning and the coming years will see an increased focus on its sustainable development. In late 2021, the city released a resilient infrastructure plan to protect Lower Manhattan from future flooding, calling for the creation of a two-level waterfront that extends the shoreline of the East River by up to 200 feet.

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COMMERCIAL LEASING Leasing Activity Improves From 2020 Lows Lower Manhattan’s office market began to slowly and tentatively emerge from the long shadow of the COVID-19 crisis last year. For all of 2021, Lower Manhattan leasing activity totaled 2.78 million sq. ft. — 24% higher than the record low set in 2020, but still the second lowest annual total over the past decade. According to CBRE, downtown leasing improved each quarter over the past year, with the fourth quarter leasing reaching the highest quarterly total since the pandemic began at 969,000 sq. ft.. Quarterly leasing activity was up 25% from the third quarter and 17% below the five-year quarterly average as real estate decisions were still in flux.

Lower Manhattan Annual New Leasing Activity, 2015-2021 Source: CBRE

A successful rollout of vaccines starting in early 2021 and into the spring, particularly among New Yorkers, boosted optimism among business, government officials and consumers. The economy has remained unsettled as new COVID variants have threatened the market’s nascent recovery. However, the U.S. and local economy are learning to function amid the pandemic, preventing shutdowns that characterized the beginning of the crisis in March 2020. Office workers have been slow to return to the physical office, with occupancy peaking around 30% in fall. According to a recently released survey of major employers citywide by the Partnership for New York City, 61% of employers expect a substantial return to in-person work by March.

Lower Manhattan Real Estate Year in Review | 2021

Million Sq. Ft. Of New Leasing Activity in 2021 — 24% Higher Than The Record Low Set in 2020

2.78

Though all Manhattan office markets improved over the dismal 2020 year, Midtown and Midtown South saw a stronger resurgence compared to Lower Manhattan.

Midtown saw a return to typical leasing patterns with 5.54 million sq. ft. of leasing activity in the fourth quarter, 43% above the five-year quarterly average. Annual leasing totals were 17% below the five-year annual average at 15.43 million sq. ft.. Financial services were the leading driver of leasing, accounting for 36% of all Midtown activity in 2021. Midtown South saw a rebound in leasing activity with 1.68 million sq. ft. in the fourth quarter — 34% above the five-year quarterly average. Annual leasing

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totaled 4.79 million sq. ft., triple the leasing to occur in 2020, and was driven by the tech sector with 75% of leases being less than 50,000 sq. ft..

Flight To Quality Continues With Tenants Upgrading Their Office Space Though leasing is increasing, the market still remains soft and fragmented. As companies reevaluate their space needs, many are looking to take advantage of a tenant’s market. Class A towers are driving office leasing, as the flight to quality trend takes hold of the market. Tenants are more willing to pay higher rents in exchange for better located buildings with strong amenities and updated building systems. Sublease office spaces in these buildings (often cheaper than direct office leases) are easily taken.

Property owners that have new construction towers or heavily renovated assets are reaping the benefits of this trend. The World Trade Center campus, Brookfield Place and upgraded properties along Broadway have benefited the most in Lower Manhattan. With a few exceptions, direct and sublet vacancies are mounting in the Insurance District (the area roughly east of Broadway, north of Maiden Lane) and the Water Street corridor. Key leases signed in 2021 in Lower Manhattan best reflect this trend, with these companies relocating from outside Lower Manhattan, moving within the neighborhood and/or taking sublease space.

• Fiserv signed a 94,413 sq. ft. deal to relocate from 225 Liberty Street to One Broadway. The company will become the flagship tenant for the landmarked office building which has undergone a significant repositioning.

Source: Downtown Alliance, CBRE, JLL, Colliers International, CoStar

Tenant Name

1

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Lower Manhattan Real Estate Year in Review | 2021

Sq. Ft. Leased Transaction

Sector

Fried, Frank, Harris, Shriver & Jacobson

399,724 Renewal

Professional Services, Law

NYC Dept. of Citywide Admin.

Services

313,022 Renewal

Government

Brown Brothers Harriman & Co.

188,059 Renewal

FIRE

60 Broad Street

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140 Broadway

Daily Pay

55 Water Street

Stripe

137,274 Move Within LM/ FIRE Expansion

199 Water Street

114,907 Relocation

TAMI, Technology

Orchard Technologies

105,111 Relocation

TAMI, Technology

One Broadway

94,413 Move Within LM

FIRE

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Hudson River Trading

75,207 Expansion

FIRE

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U.S. Attorney’s Office

72,207 Renewal

Government

54,917 Renewal

FIRE

51,705 Relocation

Retail Trade

48,000 Move Within LM

TAMI, Advertising

Reddit

47,463 Relocation

TAMI, Technology

Galaxy Digital

45,927 Relocation

TAMI, Advertising

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6

7

195 Broadway

Fiserv

3 World Trade Center

86 Chambers Street

Brookfield 10 Properties

250 Vesey Street

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BarkBox

120 Broadway

Constellation 12 Agency

1 World Trade Center

13 14

• One World Trade Center had nearly 300,000 sq. ft.

in leases signed, including several sublet spaces: Constellation Agency and Reddit both sublet 48,000

Location

1 New York Plaza

• One Liberty Plaza saw three leases: The Port Authority

of New York & New Jersey and Cushman & Wakefield sublet 44,387 and 12,640 sq. ft., respectively, from AKF Group, while HealthFirst signed for a 44,025 sq. ft. sublease.

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Lower Manhattan Top Leases, 2021

• BarkBox and Golden Goose took 51,705 sq. ft.

and 13,566 sq. ft., respectively, at 120 Broadway, both relocating from Midtown South. The building recently completed a $50 million restoration and modernization.

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1 World Trade Center

300 Vesey Street

Jay Suites

40 Wall Street

Prof.

45,361 Services, Flex New LM Location Office Space

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sq. ft. from Condé Nast, IBISWorld and Network Capital Funding each took 38,000 sq. ft. from Moody’s, Templafly took 44,133 sq. ft. from High 5 Games, Newsweek sublet 40,537 sq. ft. from DAZN Group, and SiriusPoint took 26,558 sq. ft. from Lantheus Holdings.

• At 3 World Trade Center, Hudson River Trading

expanded by another 72,207 sq. ft., now occupying over 211,000 sq. ft. in the tower, while Index Exchange took a 43,000 sq. ft. sublet space from Casper.

• Clear Street Management took a 44,378 sq. ft.

sublease from MediaMath at 4 World Trade Center.

Emerging Tech Firms Find Footing In Lower Manhattan Emerging tech firms (defined as being less than 10 years old) are leveraging an increase in venture-capital funding and an advantageous real estate market to grow their physical footprints. According to research from Newmark, growth from emerging TAMI companies has surged — nearly 60% of TAMI absorption is from relatively new companies. Before the pandemic, emerging TAMI companies accounted for only 24% of overall TAMI growth.

In 2021, Lower Manhattan saw similar trends as three new firms signed leases over 100,000 sq. ft..

DailyPay, a payroll services company, moved and expanded within Lower Manhattan. The firm took 137,274-sq.-ft. of sublet space from S&P Global at 55 Water Street, taking about two-thirds of the space they made available for sublet. DailyPay expanded from 42,500 sq. ft. at 55 Broad Street. Stripe, a financial-technology company, relocated from Midtown South to a 114,907 sq. ft. space within the WeWork at 199 Water Street. Orchard Technologies announced its expansion and relocation downtown, signing a 105,111 sq. ft. lease at 195 Broadway. The real estate technology company jumped around various flex office space providers in Midtown South, rapidly growing from 25,000 sq. ft..

Lower Manhattan Real Estate Year in Review | 2021

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Lower Manhattan Top Relocations, 2021 Source: Downtown Alliance, CBRE, JLL, Colliers International, CoStar

Tenant Name

SF Leased Transaction

Sector

Stripe

199 Water Street

114,907 Relocation

TAMI, Technology

Orchard Technologies

105,111 Relocation

TAMI, Technology

BarkBox

51,705 Relocation

Retail Trade

Reddit

47,463 Relocation

TAMI, Technology

Galaxy Digital

45,927 Relocation

FIRE

Tempafly

44,133 Relocation

TAMI, Technology

Masterworks.io

43,377 Relocation

TAMI, Technology

Index Exchange

3 World Trade Center

43,000 Relocation

TAMI, Advertising

Recycle Track Systems

21,312 Relocation

Other

Consulate General 10 of Morrocco

18,294 Relocation

Government

Location

1

2

3 4

• At Brookfield Place, Galaxy Digital took a 45,927 sq.

ft. sublet from IQVIA, Masterworks sublet 43,377 sq. ft. from Fiserv and AKF Group took a 22,826 sq. ft. sublet from QuisLex.

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195 Broadway 120 Broadway

1 World Trade Center

300 Vesey Street

1 World Trade Center

225 Liberty Street

115 Broadway

55 Broadway

11 12 13 14

Empire Media Group 17,460

TAMI, Media

100 Broadway

Relocation

Golden Goose

13,566 Relocation

Retail Trade

Superbolt

12,566 Relocation

Professional Services, Consulting

No Fraud

12,370 Relocation

TAMI, Technology

12,063 Relocation

Professional Services, Consulting

120 Broadway

123 William Street

1 World Trade Center

Medical Knowledge 15 Group 1 World Trade Center

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Relocations Into Lower Manhattan Slow Considerably Throughout 2021, there were 1.48 million sq. ft. of lease renewals. In the five years preceding the pandemic, renewals were about 20% of total leasing velocity (new leasing plus renewals). Since 2020, renewals have taken a greater share of total velocity — 45% in 2020 and 35% in 2021. Those renewing their leases were Lower Manhattan’s traditional office-occupying industries: law, government, finance and real estate. Among the largest renewals were:

• Fried, Frank, Harris, Shriver & Jacobson: 399,724 sq. ft. at 1 New York Plaza. The law firm has been in Lower Manhattan since 1979 and committed to another ten years;

• NYC Department of Citywide Administrative

Services: 313,022 sq. ft. at 60 Broad Street. The space holds the city offices for the Department of Homeless Services, the Taxi and Limousine Commission and the Department of Probation;

• Brown Brothers Harriman & Co: 188,059 sq. ft. at

140 Broadway. The private investment bank, while renewing their lease, downsized from 427,000 sq. ft.;

• U.S. Attorney’s Office: 72,258 sq. ft. at 86 Chambers Street; and

• Brookfield Properties: 54,917 sq. ft. at 250 Vesey

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as office tenants continue downsizing and/or taking advantage of a tenant-friendly market to move into modern and wellamentized office buildings.

Despite improvements in leasing activity, there continues to be a heavy volume of direct and sublease spaces being put on the downtown market. Different areas within the downtown market are faring worse than others in terms of vacancies, largely determined by the age and quality of office buildings. The Insurance District submarket (roughly east of Broadway, north of Maiden Lane) has seen overall vacancy rates grow to 30.6%, a stunning 19 percentage point increase over the past year — the highest vacancy among all Manhattan submarkets. On the other hand, the World Trade Center submarket (primarily the WTC campus and Brookfield Place complex) has seen overall vacancy rates modestly increase by two percentage points to 19.3%.

Lower Manhattan’s vacancy rate is the highest among the other Manhattan markets. Midtown’s overall vacancy rate increased over the past year from 15.8% to 20.4%. Class A office vacancy in Midtown jumped to 19.4% as 2.3 million sq. ft. became available; class B office vacancy also increased dramatically to 22.9%, up 4 percentage points from Q4 2020. Within Midtown, the West Side submarket (north of 42nd Street, west of Times Square) saw the greatest increase in vacancy over the past year.

Street.

Vacancy Rates Rise Across Manhattan, Particularly Among Class B And C Office Buildings According to Cushman & Wakefield, Lower Manhattan’s overall vacancy rate continued to rise as 3.1 million square feet of office space entered the market, including six large blocks of office space over 100,000 sq. ft.. Overall vacancy stood at 21.1%, up 3.3% from last quarter and 7.4% yearover-year. This is the highest overall vacancy in decades.

Midtown South’s overall vacancy increased five percentage points to 19.8%, driven by spaces being added in the Madison/ Union Square submarket. Class A office vacancies in Midtown South also saw increases to 16.8%, albeit much slower due to the high demand for top quality buildings in this submarket.

Class B office vacancy hit 23.8%, a 7.1 percentage point increase from late 2020. In total, direct vacancy has increased by 165% since the pandemic began.

Across office-class types in Lower Manhattan, class A vacancy spiked from 15.1% in the fourth quarter of 2020 to 21.3% by the end of 2021. Newly added class A direct (not sublet) office space comprised nearly 44% of all downtown direct vacancy. The class B vacancy rate was 22.4%, up 11 percentage points year-over-year. Vacancies in class B and C office buildings across the city should be anticipated to rise,

Lower Manhattan Real Estate Year in Review | 2021

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Lower Manhattan’s 30 Largest Private Sector Tenants In 2021 Source: Downtown Alliance, CBRE

Tenant Name

SF Occupied

Sector

1

Goldman Sachs

2,100,000

FIRE

2

Morgan Stanley

1,253,589

FIRE

3

American Express

1,190,419

FIRE

4

WeWork*

1,073,617

Prof. Services, Flex Office Space

5

Bank of NY Mellon

969,100

FIRE

6

Condé Nast

923,723

TAMI, Media

7

Sullivan & Cromwell

774,789

Prof. Services, Law

8

Moody’s Corporation

716,258

FIRE

9

Meredith Corp.

713,184

TAMI, Media

10

GroupM

702,843

TAMI, Advertising

11

Bank of America*

654,240

FIRE

12

S&P Global

648,450

FIRE

13

Spotify

567,505

TAMI, Technology

14

Verizon

561,164

TAMI, Technology

15

Cleary Gottlieb

501,413

Prof. Services, Law

16

EmblemHealth

474,832

FIRE

17

Holtzbrinck Publishing Group

436,957

TAMI, Media

18

Royal Bank of Canada

405,947

FIRE

399,724

Prof. Services, Law

365,203

Other

348,987

Prof. Services, Law

19 20 21

Fried, Frank, Harris, Shriver & Jacobson United Federation of Teachers Cadwalader, Wickersham & Taft

22

Omnicom Group

335,956

TAMI, Advertising

23

Jones Day

330,210

Prof. Services, Law

24

J.Crew

324,658

Other, Retail Trade

25

Pace University

315,014

Education

26

Uber

307,970

TAMI, Technology

27

Convene

307,970

Prof. Services, Flex Office Space

28

JPMorgan Chase*

302,199

FIRE

29

Leman Preparatory

301,170

Education

30

Oppenheimer

291,120

FIRE

In 2021, Deutsche Bank left entirely, while Bank of America, AIG, JPMorgan Chase, and Brown Brothers Harriman signficiantly downsized their Lower Manhattan footprint. Knotel’s declared bankruptcy in 2020, giving up several Lower Manhattan leases, while WeWork reorganized and cut a few leases.

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Overall Vacancy Rates By Submarket

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Overall Asking Rents By Submarket

Source: Cushman & Wakefield

Source: Cushman & Wakefield

21.1% 20.4% 19.8%

$73.75 $70.78

$57.80

Office Asking Rents Continue To Inch Downward According to Cushman & Wakefield, Lower Manhattan’s overall average asking rent fell by 3.9% to $57.80 per sq. ft. — the first time pricing has fallen below $60 since the first quarter of 2018. Sublease asking rents dropped 5% to $48.89 per sq. ft.. Class A asking rents fell by 5.5% over the quarter, to $61.83 per sq. ft. — marking the lowest since Q2 2017 — as lower-priced space has continued to be added to the market. Class B average asking rents were stable over the past quarter at $52.46. Asking rents hit high water marks in late 2018, during which average overall rents were nearly $64 and average class A rents were almost $68.

Overall and class A office rents in Midtown held steady over the past quarter at $73.75 and 79.60, while rents in Midtown South have seen strong growth, as landlords saw a flight to the newest and highest quality assets. Though overall asking rents rose 3% from the previous quarter to $70.78 per sq. ft., class A rents in Midtown South rose a dramatic 7.8% to $90.82 — due to higher-priced space entering the market at 11 Madison Avenue.

Lower Manhattan Real Estate Year in Review | 2021

The trend of flight to quality office assets, combined with sublet additions and considerations around downsizing due to remote work, has given tenants much to consider for future office space and has put pressure on downtown office rents. Offices in higher-priced areas or trophy office buildings that were once viewed as unattainable can now be given a second glance.

Larger rent declines are being seen during negotiations in either lower taking rents and/or increases in tenant concessions. Downtown’s direct office space had a $19 per sq. ft. premium to its sublease space – the narrowest spread among the Manhattan submarkets ($24 for Midtown and $34 for Midtown South). Additionally, according to CBRE, downtown taking rents are now on average 13% below asking rents (pre-pandemic, the difference was around 5%). The average free-rent period increased to 17 months from 12 months at the end of 2019.

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Largest Available Blocks Lower Manhattan’s largest blocks of available space are concentrated on the east side of the neighborhood, primarily along Water Street. Three buildings are entirely vacant and undergoing significant renovation, following the departure of full-building tenants Deutsche Bank, Citigroup and AIG. Though they are being marketed for lease, the three towers won’t be available to be occupied for at least another two years. In addition to the existing blocks of available office space at the World Trade Center campus, 2 World Trade Center is still awaiting an anchor tenant before construction can begin on the 2.7 million sq. ft. office tower.

According to Cushman & Wakefield, the entirely vacant office buildings are as follows:

• 60 Wall Street has 1.6 million sq. ft. available as

longtime anchor tenant Deutsche Bank completed a long planned move to Columbus Circle in summer 2021.

The building is undergoing a full $250 million renovation, including a reimagined lobby and public space, and anticipates construction to be complete in 2023.

• 111 Wall Street has over 1 million sq. ft. available

following Citigroup’s consolidation to 388 Greenwich Street in December 2019. The building was sold in early 2020 for $175 million. The 24-story, 1.1 millionsquare-foot building will undergo a $500-million renovation, which includes upgrades to the lobby and building systems and installation of new amenities. The renovation should be completed by 2024.

•

75 Water Street has 676,000 sq. ft. available 1 following AIG’s relocation to 28 Liberty Street and other offices in Midtown and Jersey City in early 2022. The 31-story building was sold in 2019 to Metroloft for $270 million. Plans for the tower are incomplete, with the possibility of the tower being all or partially converted to residential.

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Properties with large blocks available for immediate occupancy include:

• 80 Pine Street has nearly 800,000 sq. ft. in availability,

including blocks from AIG and Cahill Gordon & Reindel who relocated within Lower Manhattan. The building has undergone an extensive capital improvement program, including a redesigned lobby, new building systems and two floors of indoor and outdoor amenity spaces.

• 4 New York Plaza is another building facing an entire

vacancy with over 800,000 sq. ft. available for lease, including a 490,0000 sq. ft. sublease block from JPMorgan Chase and a 317,000 sq. ft. direct space from the New York Daily News and others.

• One World Trade Center has a 477,000 sq. ft. block of available space that Condé Nast put up for sublease.

Condé Nast has put up a total of 855,000 sq. ft. of sublease space (70% of their original 1.2 million sq. ft. lease), of which they have rented out 188,000 sq. ft..

• 222 Broadway has 473,000 sq. ft. available for as Bank of America/Merrill Lynch vacated their space;

• 140 Broadway has over 417,000 sq. ft. on the lower 20

floors of the building. Brown Brothers Harriman recently renewed their lease, but significantly downsized, giving up nearly 240,000 sq. ft..

• One Liberty Plaza has 330,000 sq. ft. block of available space on the eight top floors.

• 110 William Street has 280,000 sq. ft. of space

available after the New York City Economic Development Corporation and the Department of Small Business Services departed for One Liberty Plaza in 2019.

• 120 Broadway has nearly 255,000 sq. ft. of space

available on a contiguous block at the building’s base, after the New York State Attorney General left for 28 Liberty Street.

• 200 Vesey Street has nearly 222,000 sq. ft. of space

available on four floors, with the departure of the Securities and Exchange Commission to 100 Pearl Street.

• 3 World Trade Center has over 200,000 sq. ft. available across two contiguous blocks in the upper portion of the tower.

Lower Manhattan Real Estate Year in Review | 2021

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Return To Office Continues To Be Pushed A highly successful vaccination rollout began in early 2021, with 70% of New York adults receiving their first dose by June. Many large private employers began announcing plans to bring employees back to their offices following Labor Day.

111 Wall Street

However, as the summer closed, the Delta variant was spreading rapidly across the country, and many businesses appeared to shift expectations on when a more robust return to in-person work would be advisable. While there was hope that employees would begin to return to offices in greater numbers after Labor Day, many private-sector companies extended their work-from-home policies until early 2022. Mayor de Blasio, however, directed roughly 80,000 city workers across the five boroughs to return to the office in mid-September and to be vaccinated by early November. Private-sector companies have greatly varied in their return-to-work requirements: financial services and law firms have been more aggressive in returning workers to the office, while tech and creative industries continued to work remotely.

This latest wave of COVID-19 cases driven by the Omicron variant has complicated return-to-work plans yet again.

Of the large NYC employers who responded to a recently released Partnership for New York survey, 75% reported delaying in-person work requirements during the current case surge. However, the same survey revealed that 61% of large employers expect half or more of their staff to be working in person by March. Newly elected Mayor Eric Adams has also made encouraging in-person work a key part of his approach to his COVID recovery strategy.

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Rendering of New Atrium & Lower Manhattan Real Estate Year in Review | 2021 Subway Entrance

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2021 Property Sales The property sales market was active in 2021 with $1.87 billion in closed property deals. This past year’s sales were 6% higher than 2019 levels ($1.77 billion) and 95% higher than 2020 levels ($959 million). Lower Manhattan recorded 14 closed transactions in 2021, an increase from 2020 metrics where 11 properties were traded.

Office Sales 100 Pearl Street: German investment firm Commerz Real closed on the purchase of 100 Pearl Street for $850 million from owners GFP Real Estate and Northwind Group. GFP will remain under a management agreement. The office sale is one of the largest to take place since the pandemic began and it underscores foreign investors’ healthy appetite for Class A, repositioned office buildings in New York. The 968,000-sq.-ft. office building, formerly known as 7 Hanover Square, recently completed a $250 million modernization and renovation. GFP and Northwind bought the building in 2019 for $310 million when Guardian vacated. The building is now 96% leased, which includes long-term deals with NYC Health + Hospitals and the Securities and Exchange Commission.

100 Pearl Street

86 Trinity Place: Investment firm Yucaipa Companies purchased 86 Trinity Place from Clarion Partners for $155 million. The 176,000-sq.-ft. landmarked building served as the headquarters of the American Stock Exchange from 1953 until it was acquired by the New York Stock Exchange in 2008. The building is expected to undergo conversion into The Ned, a luxury hotel and private members club, in 2023.

14 Vesey Street: Jack Terzi’s JTRE closed on the purchase of 14 Vesey Street from the New York County Law Association for $19 million. The four-floor, 30,000-sq.-ft. building is currently being marketed for commercial use.

Office Condo Sales 30 Rector Street: The Union of Orthodox Jewish Congregations of America purchased two commercial condo units totalling 48,824 sq. ft. at 30 Rector Street for $25 million from Philips International Holding Corp.

161 William Street: Pace University purchased a 17,974 sq. ft. office condo at 161 William Street from Jack Resnick & Sons for $10.6 million, taking over the remainder of

Lower Manhattan Real Estate Year in Review | 2021

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the building. In 2022, the landlord will create a new Pace branded lobby for the building.

156 William Street: The Blue School sold two commercial condo units spanning 26,000 sq. ft. at 156 William Street for $20 million to PHC William Street Condo LLC. The Blue School originally paid $27 million for the two units in 2016.

The middle school will consolidate with its primary school location at 241 Water Street in the Seaport.

Retail Condo Sales 102 Chambers Street: K Property Group Funds closed on the purchase of a 3,086 sq. ft. retail condo at 102 Chambers Street for $12 million from Cape Advisors. The space is occupied by Spectrum cable, which opened in late 2020. The retail condo is at the base of the new 23-condo unit building, known as 30 Warren Street, which opened in late 2020.

Multi-Family Residential Sales 15 Park Row: Broadway Management Co., the former owners of J&R Music World located at 15 Park Row, sold the building to investor Atlas Capital Group for $141.3 million or $419,000 per unit. The 31-story, 337-rental unit property includes the retail space that once served as home for J&R Music and Computer World.

116 John Street: Silverstein Properties purchased the 416-unit rental property at 116 John Street for $247.5 million from Metro Loft Management. Metro Loft converted the 266,000 sq. ft. office building to residential in 2012.

Hotel Sales 100 Greenwich Street: McSam Hotel Group sold the 192room Fairfield Inn & Suites at 100 Greenwich Street to Concord Hospitality for $69 million. The hotel opened in 2017. Concord Hospitality owns four other hotel properties in New York City, including the 271-room AC New York Downtown at 151 Maiden Lane.

51 Nassau Street and 126 Water Street: Mack Real Estate took control of a portfolio of seven hotels from Hersha Hospitality Group and Cindat USA for $316 million following foreclosure proceedings. Hersha and Cindata acquired the portfolio in 2016, when the seven properties were worth a combined $816.3 million. Among the seven hotels, Mack now controls the 113-room Holiday Inn at 51 Nassau Street and 112-room Holiday Inn Express at 126 Water Street.

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Mixed-Use Sales A portfolio of three buildings on Stone Street sold for $16 million to two separate buyers.

52 Stone Street: A four-story, 8,000 sq. ft. building that houses Stone Street Tavern and three rental apartments, sold for $6.3 million to Ronan Downs. Downs owns Stone Street Tavern, The Dubliner, and Beckett’s Bar and Grill.

53-55 Stone Street: The two adjoining buildings, which span 14,690 sq. ft., housing the bars Underdog and Revolution Taco, as well as seven rental apartments, sold for $10.1 million to Davean Holdings. Davean also owns 6 Stone Street and 126 Pearl Street. Developer Goldman Properties initially listed the portfolio for $20 million in November 2020.

Land & Development Sites 111 Wall Street: A joint venture between Nightingale Properties and Wafra Capital Partners purchased the fee interest at 111 Wall Street for $220 million from Omnispective Management. The partnership purchased the building in 2020 for $175 million. Nightingale and Wafra recently secured a $500 million loan to redevelop the property, including $89 million in C-PACE financing, a city-sponsored loan program to help landlords make energy efficiency retrofits. 111 Wall Street is the first participant in the C-PACE program.

111 Washington Street: North Carolina-based developer Grubb Properties bought the 11,255 sq. ft. development site at 111 Washington Street from Pink Stone Capital for $89.2 million — the most expensive development site sold in New York City in 2021. Grubb plans to build a 50-story building, which will be known as 8 Carlisle, containing 22,000 sq. ft. of ground-floor retail and 400 residential units. 8 Carlisle, which is set to receive tax abatements under the city’s expiring 421a program, will include a mix of affordable and market-rate rental units. The development is poised to begin construction by Summer 2022.

32 Old Slip: Investment firm iStar purchased a $90.5 million stake in the fee interest at 32 Old Slip from developer Melohn Properties. Melohn Properties purchased the fee interest for $197.5 million in 2015 from a partnership between RXR Realty and David Werner Real Estate.

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RETAIL Retail Openings Reach Pre-Pandemic Levels The pace of retail openings returned to pre-pandemic levels, with nearly 100 retailers opening in 2021. For comparison, 56 retailers opened Lower Manhattan in 2020 and 105 opened in 2019. More than half of the openings were food and beverage operators. Many retailers that opened in 2021 were long-awaited, major new additions to the Lower Manhattan market. They include:

• Alamo Drafthouse at 28 Liberty Street debuted in midOctober. The 14-screen cinema has been in the works since 2017. The movie theater also features The Press Room, a bar and museum featuring vintage letterpress film advertising plates;

• The team behind Michelin-starred Crown Shy opened

their long-awaited, fine-dining restaurant SAGA on the top four floors of 70 Pine Street. The space features two floors of dedicated private dining and Overstory — a cocktail bar with a wraparound terrace;

• Two Greek restaurants opened: Skinos Mediterranean at 123 Washington Street and Anassa Taverna at 102 North End Avenue;

• A wide range of international cuisines opened full-

service dining across Lower Manhattan, including: Tagmo, an Indian restaurant and bakery, at 226 Front Street, ICCA, a Japanese restaurant, at 20 Warren Street, Mezcali, a Mexican restaurant, at 83 Maiden Lane and Lil Chef Mama, a Thai restaurant, at 27 Cliff Street;

• On Stone Street, Bodega Gran Via, a Spanish tapas

and wine bar, and Harry’s Cafe, a cafe serving coffee, cocktails and lightbites;

• Several casual eateries opened, including: 3 Times,

a soup dumpling spot at 66 Pearl Street, Five Guys Burgers at 80 Maiden Lane, Inday, a fast-casual Indian restaurant at 1 New York Plaza, OneSeed, a healthy, fast-casual eatery at 111 Murray Street, and Zucker’s Bagels at 125 Fulton Street.

Lower Manhattan Real Estate Year in Review | 2021

• Two high-end gyms: Life Time Studio Battery Park at 1 West Street and Hydra Studios, a boutique fitness studio, at 120 Wall Street; and

• Two art galleries in the Seaport: SN37 and Calderón.

A few notable Lower Manhattan retailers that were thought to have permanently closed during the pandemic reopened or announced plans to reopen. They include:

• The Paris Cafe reopened in November at 119 South

Street under new ownership. The Paris Cafe has been in operation since 1873;

• Xi’an Famous Foods reopened at 10 Liberty Place in November;

• Delmonico’s announced plans to reopen at 56 Beaver Street in 2022;

• Manhatta will reopen its penthouse dining room at 28 Liberty Street in spring 2022;

• While Blue Ribbon Federal Grill closed at 84 William

Street, the team announced the restaurant will reopen as a Blue Ribbon Sushi Bar & Grill in 2022;

• Racines closed its wine bar at 94 Chambers Street in July 2021, but will reopen under new management in 2022; and

• Daniel Boulud announced plans for a to-be-named

restaurant in the former Augustine restaurant space in The Beekman Hotel.

Shopping Complexes Amend Their Offerings Across Lower Manhattan’s three shopping centers, there were several notable openings and announcements, as well as closures:

• Westfield World Trade Center: Twelve retailers closed

including Victoria’s Secret, Fossil, Camper, Aldo, Tous, Invicta, Samsonite, Roberto Coin and Dior Cosmetics.

Sweetgreen, Haagen Dazs and Swarovski opened within the center, as well as the seasonal Oculus Beer Garden.

Another dozen retailers, primarily food and beverage tenants, are slated to open, including Taco Bell Cantina, Dunkin’ and Proper Hall, a beer hall.

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Alamo Drafthouse Cinema at 28 Liberty Street

• Brookfield Place: Six retailers closed, including

children’s shops Monica+Andy and Babesta. Luxury boutiques Adam Lippes and Norwegian Wool debuted their first stores. In Hudson Eats, four new casual eateries opened — Sauce Pizzeria, Naya, Mah Zer Dahr Bakery and Ani Ramen — all replacing eateries that closed during the pandemic. Other eateries to open across the complex include Italian sandwich shop Cicci Di Carne, Starbucks, and Devon & Blakely. Adam Grooming Atelier, a barbershop, also opened, while Plaza M Spa will open this upcoming year.

• The Seaport: Five new restaurants debuted on Pier 17:

Momofuku’s Ssäm Bar (replacing Bar Wayō), Upstairs at Ssäm Bar, a Korean barbecue restaurant with karaoke rooms, Andrew Carmellini’s Italian chophouse Carne Mare and Mister Dips, a casual burger joint. Pearl Alley, an extensive indoor/outdoor cocktail bar, also was unveiled. Later this year, The Tin Building by JeanGeorges Vongerichten, will be unveiled. The 53,000-sq.ft. property will feature six sit-down restaurants, six casual eateries, a host of bars, and a larger marketplace.

Another new restaurant helmed by Wylie Dufrense and Josh Eden will open in the Fulton Market Building.

Lower Manhattan Real Estate Year in Review | 2021

Retail Coming Soons Looking forward, there are a few key retailers and attractions are anticipated to open this year, including:

• Construction is wrapping up at Macklowe Properties’ One Wall Street conversion, where Whole Foods will open a 44,000-sq.-ft. grocery store and Life Time Fitness will open a 74,000-sq.-ft. gym, both in late 2022;

• Urbanspace, a 16-vendor food hall, will open at 100

Pearl Street in spring 2022. The food hall will double as an enclosed public throughway connecting Pearl and Water Streets;

• Paris-based Culturespace will debut an immersive art

exhibition called Hall des Lumières in the 30,000-sq.ft. hall in the former Emigrant Savings Bank at 49 Chambers Street;

• The team behind the Sleep No More immersive theater production in Chelsea, will debut a performance venue and cafe space in the long-vacant banking hall at 20 Exchange Place in late 2022; and

• QC Terme NY, a day spa, will open soon in three historic buildings at the northern tip of Governors Island. This is the first location of the luxury spa outside of Italy and France.

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SAGA at 70 Pine Street Retail Closures Slow Significantly

• Staples and New York Sports Club at 217 Broadway; • The Wooly Public, a casual restaurant in the Woolworth Building at 9 Barclay Street;

• Manhattan Proper, an upscale bar and restaurant, at 6 Murray Street;

• Latin Social, a restaurant and bar, at 75 Maiden Lane; and • Jack’s Stir Brew, Made Fresh Daily, and Thai Farm

100

Retailers Opened In Lower Manhattan In 2021 — A Return To Pre-Pandemic Levels Retailers Close In Lower Manhattan In 2021 — A Significant Decrease from 2020 and Fewer Than In 2019

84

While several notable retailers closed in 2021, the rate of retail closures slowed significantly from 2020 levels. Eighty-four retailers closed this past year, down 50% from the record 163 retailers that closed in 2020. In fact, fewer retailers closed in 2021 than before the pandemic in 2019 (108). Of the permanent closures, approximately 52% were restaurants/ bars, 32% shops and 15% personal/business services.

Notable closures include: • Leonidas Belgian Chocolates and Ray’s Jewelry at 3 Hanover Square;

Kitchen in the Seaport.

Lower Manhattan Real Estate Year in Review | 2021

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Asking Retail Rents See Slight Decline According to the Real Estate Board of New York’s fall 2021 retail report, average asking rents for ground-floor retail along Broadway (Battery Place to Chambers Street) were $395 per square foot — down 3% from 2020. Rents along Broadway range from $100 to $765 per sq. ft.. Lower Manhattan retail rents have seen less intense fluctuation during the pandemic, as rents have had a generally lower base than other prime parts of Manhattan. Since 2016, average rents along Broadway have actually increased 7%, while all other retail corridors in Manhattan have seen considerable decreases over the past five years.

Retail demand in Manhattan normally rests on three pillars - residents, tourists, and daily office workers. Across the city, residential demand has continued to grow, while tourism and daily commuters remain a fraction of prepandemic life. Areas such as Times Square, Herald Square and Fifth Avenue that have historically commanded very high asking rents and are more reliant on tourism, continue to see sharp declines in retail rents. Rents stabilized in more residential areas of the city, while office-heavy districts like Grand Central and Midtown East continue to lag. Residents in Lower Manhattan have been a vital support to retailers as tourists and office workers slowly return.

Vaccination Requirement For Indoor Dining And Entertainment In August 2021, Mayor de Blasio instituted the Key to NYC program — requiring all restaurants, gyms and theaters to require proof of vaccination to enter. While the program put enforcement onto individual businesses, the mandate was largely embraced. Requiring vaccinations for indoor activities has driven more revenues and made customers feel safer.

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New York City Reopening NYC Timeline

Businesses Allowed to Reopen*

6/8/2020

construction, non-essential businesses for pickup or curbside

6/22/2020

outdoor dining, salons and barbers, real estate showings, offices, in-store shopping (not malls)

7/20/2020 low risk outdoor arts and entertainment 8/24/2020 museums at 25% occupancy 9/2/2020

gyms (not individual fitness boutiques) at 33%

9/9/2020

indoor malls can reopen

9/30/2020 indoor dining at 25% occupancy 12/11/2020

indoor dining prohibited again due to rising virus cases

2/12/2021

indoor dining recommences at 25% occupancy

2/26/2021 indoor dining at 35% occupancy 3/5/2021

movie theaters at 25% occupancy

3/19/2021 indoor dining at 50% occupancy 4/1/2021

domestic travelers to New York state no longer need to quarantine

4/2/2021

events, arts & entertainment venues at 33% (or 100 indoors and 200 outdoors)

5/3/2021

indoor bar seating resumes at 50% occupancy

5/13/2021

CDC lifts federal mask mandate for vaccinated individuals

capacity limits for indoor venues, bars, and 6/15/2021 restaurants are lifted as 70% of New Yorkers (18+) have received first dose of vaccine vaccination mandate starts for entrance at 8/16/2021 NYC restaurants, bars, gyms and other indoor venues. Enforcement began 9/13/21 11/8/2021

fully vaccinated international visitors allowed to resumed travel to US

* This list of businesses allowed to reopen is illustrative, not exhaustive.

Please refer to official New York State guidance.

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Tourism Sees Slow, But Steady Return

Prior to the pandemic, Lower Manhattan had enjoyed years of rising tourism, most recently seeing 14 million visitors in 2019, of which 60% were international travelers.1 With travel disrupted and international visitation virtually halted in 2020, Lower Manhattan saw an 80% decrease in tourism, with 2.7 million unique visitors. International tourism dropped to 13% of total visitorship. On the inverse, visitors from within the city and the metro area grew from 10% to 65% of 2020 visitorship. NYC & Company estimated that citywide tourism in 2020 was 22.3 million (down two-thirds from 2019’s 66.6 million visitors). International visitation isn’t expected to reach 2019 levels until at least 2024.

International travel is key for New York City, as foreign visitors often have extended stays and spend more per trip than domestic visitors.

In early April 2021, quarantine requirements and testing protocols were lifted for domestic travelers to New York State. September saw the return of many major New York institutions — Broadway reopened and the US Open and New York Fashion Week returned — bringing added travel to the city. On November 8, 2021, international travel restrictions were lifted to fully vaccinated individuals, once again allowing visitors from Europe, Canada, Mexico, India, Brazil and China, among others, to travel to the United States. While updated figures for 2021 are still being determined and are expected to be released in late February 2022, the data will certainly reflect slow, but steady improvements from 2020.

Hotel Inventory Recalibrates The current hotel inventory in Lower Manhattan stands at 7,967 rooms across 38 hotels. Continued struggles in the hospitality industry have led to another five permanent hotel closures (across 1,182 rooms) in Lower Manhattan in 2021. This is in addition to three permanent hotel closures (with 436 total rooms) in 2020. In total, there have been eight hotel closures (1,618 total rooms) since the pandemic began.

On a positive note, of the eight hotel closures in Lower Manhattan over the past two years, the properties have not remained vacant. All have been repositioned to new uses, reopened under new ownership and/or rebranded with new hotel brands. In fact since the pandemic began, Lower Manhattan has seen the number of hotel rooms remain steady, despite the tumultuous market. Those to permanently close in 2021 are:

• The Moxy NYC Downtown at 26 Ann Street had been

temporarily closed since the beginning of the pandemic and officially closed in May 2021. The 298-room hotel reopened in November 2021 under new ownership.

• The AKA Tribeca at 85 West Broadway closed in June

2021. The 100-room hotel went under new ownership and was rebranded back to its original name, the Smyth Tribeca.

• The Courtyard by Marriott Downtown Manhattan/

WTC closed in July 2021, after a brief reopening in the summer of 2020. The 326-room hotel anticipates reopening in 2022 as the first U.S. location of Motel One, a European-based lifestyle hotel chain.

• Sonder, a 169-room, apartment-style hotel, closed

at 20 Broad Street. Sonder continues to operate in residential buildings across Lower Manhattan, including adding two new locations in 2021 at 2 Washington Street and 17 John Street.

• The Radisson Wall Street had been operating as a

temporary homeless shelter since the pandemic started.

Plans were announced in summer 2021 for the 289room hotel to be permanently converted to a homeless shelter.

Among those to close in 2020:

• The Assemblage at 17 John Street had its 79 rooms

rebranded into a Sonder, apartment-style hotel. Knotel assumed operations of the attached coworking office space.

• AKA Wall Street at 84 William Street repositioned its 140-room, extended-stay hotel into a 137-unit rental building.

• W New York Downtown at 8 Albany Street rebranded its 217 rooms into The Washington.

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Audience Research & Analysis

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Over 1,000 rooms across six hotel developments opened in 2021. They include:

• WhyHotel Front + Wall Street at 110 Wall Street. The

232-room, extended-stay hotel took over the space that was formerly operated by WeLive, a co-living concept launched by WeWork in 2016 and closed in 2020.

• The dual Marriott property at 215 Pearl Street opened

with a Residence Inn on the upper floors (120 rooms) and a Courtyard on lower floors (200 rooms);

• Sonder opened two apartment-style, hotel properties

at 2 Washington Street with 345 rooms and at 17 John Street (former Assemblage hotel) with 79 rooms.

Despite the challenging travel atmosphere, nearly 14,000 hotel rooms in 59 developments are still planned across the City — including 1,892 rooms across ten hotels in Lower Manhattan. Five hotels containing 950 total rooms are expected to open in 2022, including:

•

T he Wall Street Hotel at 88 Wall Street, with 181 rooms;

• Hotel Indigo at 120 Water Street, 128 rooms; • The Fidi Hotel at 11 Stone Street, 143 rooms; • Motel One at 133 Greenwich Street, 326 rooms (after

a renovation and rebranding of the former Courtyard by Marriott Downtown Manhattan/WTC); and

• Aloft Hotel at 50 Trinity Place, 173 rooms.

Another five hotels are in the early construction or planning stages, including: • A new 70-room boutique hotel, operated by Firmdale Hotels, at 86 Warren Street; and

• The Ned, a London-based luxury hotel and private

members’ club, announced plans to open a 174-room hotel in the former American Stock Exchange Building at 86 Trinity Place.

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Lower Manhattan Hotel Pipeline Source: Downtown Alliance

• Casa Cipriani,located on the upper level of the historic

Battery Maritime Building. The 47-room, luxury property also includes a spa and private members club. An 800-person Cipriani event space opened in late 2019.

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Hotel / Address Hotel Indigo NYC Downtown

1

128

2022

11 Stone Street

Premier Emerald LLC

143

2022

The Wall Street Hotel

Actium Development

180

2022

Motel One

Union Investment

326

2022

Aloft Hotel

50 Trinity Place

Fit Investment

173

2022

TBD Hotel by Firmdale Hotels

Solil Mgmt/ Firmdale

70

2023

The Ned Hotel at American Stock Exchange

Yucaipa Companies

174

2023

AC Hotel

Hidrock Realty

230

TBD

Tempo by Hilton

Hidrock Realty

296

TBD

TBD Hotel

The Moinian Group

172

TBD

The Fidi Hotel

3

88 Wall Street

4

133 Greenwich Street

5 6

86 Warren Street

7

Rooms Open Date

Fortuna Realty

120 Water Street

2

Owner/ Developer

123 Greenwich Street

8

112 Liberty Street

9

140-142 Fulton Street

10

7 Platt Street

Total Hotels in the Pipeline

10

Total Hotel Rooms in the Pipeline

1,892

7,967

Hotel Rooms in 38 Hotels With Another 1,892 Rooms Across 10 Hotels Planned

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Inventory And Development

Lower Manhattan has 33,650 units in 342 residential buildings. Nearly 4,000 units in 14 buildings are under construction or planned for development, with about 61% currently planned as rental units and 39% as condos. Four residential buildings containing 502 units opened during 2021:

• 130 William Street: a 66-story, 244-unit condo

tower developed by Lightstone, received its temporary certificate of occupancy in February and construction is expected to be finalized in spring 2022. Sales at the tower have been incredibly successful, falling into the top new development projects in 2021 for sales volume and contracts signed. The site will also include a landscaped plaza on William Street and nearly 21,000 sq. ft. of retail space;

• 77 Greenwich Street: Trinity Place Holdings’ 42-story, 90-unit condo tower received its temporary certificate of occupancy in March and construction will wrap in early 2022. The first eight floors of the building will contain the new home for P.S. 150, which will house 450 students when it opens in fall 2022. The project also includes the adaptive reuse of the landmarked Robert and Anne Dickey House, as well as 6,500 sq. ft. of retail space and construction of a new subway entrance for the Rector St R/W station;

100 William Street

• 84 William Street: the former 140-room AKA Wall

Street hotel, which permanently closed during the pandemic, was converted to a 137-unit rental building called The Howell; and

• 33 Park Row: construction wrapped up at, a new 31unit condominium development by Centurion Real Estate Partners and Urban Muse. The 25-story tower also has 14,000 sq. ft of commercial space. Closings began in fall 2021.

250 Water Street Lower Manhattan Real Estate Year in Review | 2021

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Looking forward to 2022, two residential developments along Broadway are expected to wrap construction and open, bringing another 775 units to the market.

• 7 Dey Street: developed by SL Green, the 31-story,

209 rental unit tower includes 63 affordable units and 48,000 sq. ft. of retail and commercial office space;

• One Wall Street: Macklowe Properties is finalizing

construction on the conversion of the landmarked office tower into 566 condominiums. The building will offer 157,000 sq. ft. of retail, including a 44,000-sq.-ft.

Whole Foods and 74,000-sq.-ft. Lifetime Fitness, both expected to open in late 2022.

Several key residential developments progressed forward with notable milestones this past year:

• 1 Park Row: developed by Circle F Capital, the

100,000-sq.-ft. development at the corner of Park Row and Ann Street will yield a new 23-story, 56-unit condo tower and feature 13,500 sq. ft. of retail space.

This is the last parcel along Park Row that was left to be developed after J&R Music and Computer World’s closure in 2014;

• 250 Water Street: in late 2021, the Howard Hughes

Corporation received final approvals to begin construction on its $850 million development project.

The site will transform a parking lot into a 324-foot-tall building with 270 apartments (including 70 affordable units), class A office space, retail and community space. The project will generate $50 million in funding for the South Street Seaport Museum, with $40 million generated from the Howard Hughes project and another $10 million committed by the City. In 2022, the project will break ground, starting with a comprehensive remediation of the site through the New York State Brownfield Cleanup Program;

3,977

Units In 14 Residential Buildings Under Construction Or In Development Lower Manhattan Real Estate Year in Review | 2021

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Lower Manhattan Residential Pipeline Address Condo + Rental Units Under Construction

Lease / Building Type

Units

Total

1,506

Rental New Construction

1

7 Dey Street

2

One Wall Street New Construction

3

1 Park Row

4

Open Date

209

2021

566

2022

Condo New Construction

58

2023

250 Water Street

Condo/Rental New Construction

270

TBD

5

161 Maiden Lane

Condo New Construction

80

TBD

6

45 Park Place

Condo New Construction

50

TBD

7

125 Greenwich Street

Condo New Construction

273

TBD

Condo

Condo + Rental Units In Development

Total

1

45 Broad Street Condo

2

265 Broadway

3

2,471 206

TBD

Hotel/Condo New Construction

37

TBD

75-83 Nassau Street

Rental New Construction

229

TBD

4

7 Platt Street

Rental New Construction

250

TBD

5

69 West Broadway

Condo New Construction

24

TBD

6

8 Carlisle Street Rental

400

TBD

7

130 Liberty Street

1,325

2028

New Construction

New Construction Rental New Construction

TOTAL UNITS IN THE PIPELINE

3,977

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• 130 Liberty Street: a partnership between Brookfield

and Silverstein Properties received approval from the Port Authority and Lower Manhattan Development Corporation to develop Site 5 at the World Trade Center.

The site was originally home to the Deutsche Bank building that was damaged on 9/11 and demolished in 2007; it currently serves as a Port Authority police depot and temporary plaza. The proposed 1.56 million-sq.-ft. tower is estimated to have over 1,300 rental apartments, of which approximately 25% will be affordable. Plans are still not finalized, but construction hopes to commence in 2023; and

• 111 Washington Street: in October, Grubb Properties purchased the 11,255 sq. ft. development site from Pink Stone Capital for $89.2 million. Grubb plans to build a 50-story building, which will be known as 8 Carlisle, containing 400 residential units and 22,000 sq. ft. of ground-floor retail. 8 Carlisle, which is set to receive tax abatements under the city’s expiring 421a program, will include a mix of affordable and marketrate rental units. The development is poised to begin construction by Summer 2022.

Residential Rents Set Record Highs At the end of 2020, the future remained unclear as to how many residents would permanently leave Lower Manhattan and New York City as a result of the pandemic. Prices had fallen for higher-priced apartments due to a combination of high supply, instability in the labor market and a temporary decline in population.

While tenants might not celebrate record high rents, the strength of the dense, urban Lower Manhattan market became evident in the second half of 2021. Listing discounts were largely absent during the third and fourth quarter, signalling an end to pandemic-induced concessions.

The expectation of return-to-work mandates, an influx of professionals and college students returning to the city, and widespread expiration of pandemic-discounted leases caused demand for new rentals to soar.

According to residential statistics published by Miller Samuel/Douglas Elliman, the median rent in Lower Manhattan had a number of fluctuations in 2021. The year saw a record low in the first quarter at $3,000, only to be followed by two record highs in the third and fourth quarter.

Lower Manhattan Real Estate Year in Review | 2021

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Median rent reached a record high of $4,200. in the fourth quarter. This is up 2.4% from the third quarter and up 40% from the record low in early 2021. Median rents are now 5.3% higher than they were in late 2019. Manhattan’s overall median rent rose 6.4% from the previous quarter to $3,475. Manhattan-wide median rents hit pandemic lows at $3,000 and have now roughly returned to rates seen in late 2019.

Residential Sales Volume Surges Encouraged by the pace of the city’s reopening, buyers sought to take advantage of increased savings and nearrecord low interest rates, even while listing discounts trended lower. Over 520 units were sold in 2021 — nearly double the sales from 2019 and triple the number of sales in 2020. Furthermore, the market share of units sold has shifted notably over the past year as buyers prioritized additional space. Since 2019, the share of two-bedroom units sold increased by 18%, while the share of studio units sold had the slowest growth.

The median sales price for Lower Manhattan co-ops and condos stood at $1,600,000, staying relatively consistent over the past year. Sales prices are consistently higher than pre-pandemic, with median prices 30% higher than the end of 2019. Lower Manhattan’s average price per sq. ft. of $1,725 was nearly 9% below the third quarter, though 36% higher than the same period in 2019.

$4,200

.Median Rent In Lower Manhattan — A Record High And Up 40% From The Pandemic Low in Q1 2021

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Lower Manhattan Median Residential Rent, Q1 2017 - Q4 2021 Source: Miller Samuel/Douglas Elliman

Lower Manhattan median rents set two high records in 2021 and grew 40% from the lowest point in Q1 2021.

Lower Manhattan Median Condo Sales Price, Q1 2017 - Q4 2021 Source: Miller Samuel/Douglas Elliman

Lower Manhattan median sales prices are 30% higher than the end of 2019.

Sales Volume of Lower Manhattan Condos/Co-Ops, Q1 2016 - Q4 2021 Source: Miller Samuel/Douglas Elliman

Over 520 units were sold in 2021 — nearly double the sales from 2019 and triple the number of sales in 2020.

Lower Manhattan Real Estate Year in Review | 2021

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MAJOR PROJECTS UPDATE World Trade Center The Ronald O. Perelman Performing Arts Center (The Perelman Center) Construction on the Ronald O. Perelman Performing Arts Center topped out in the spring of 2021. Exterior facade work of the 4,900 marble panels wrapped in early 2022.

The approximately 110,000-sq.-ft. cube-shaped building will feature three theaters of varying sizes which can be combined in different seating configurations and formats for an array of unique performance environments. The project is anticipated to open in 2023.

St. Nicholas Greek Orthodox Church and National Shrine Construction of the Santiago Calatrava-designed St. Nicholas Greek Orthodox Church and National Shrine is nearing completion with white marble panels now installed on the exterior. The church, located atop Liberty Park, broke ground in 2014, but stalled in late 2017 after funding issues. In November, Orthodox Patriarch Bartholomew of Constantinople led a ceremonial door-opening service. The $80-million project anticipates opening in spring 2022.

Site 5 In early 2021, a partnership between Brookfield and Silverstein Properties received approval from the Port Authority and Lower Manhattan Development Corporation to develop Site 5 at the World Trade Center, also known as 130 Liberty Street. The site was originally home to the Deutsche Bank building that was damaged on 9/11 and demolished in 2007; it currently serves as a Port Authority police depot and temporary plaza. The proposed 1.56 million-sq.-ft. tower is estimated to have over 1,300 rental apartments, of which approximately 25% will be affordable. Plans are still not finalized, but construction hopes to commence in 2023.

Pace University Pace University began construction on a new, 215,000-sq.ft. tower (which will be known as 15 Beekman Street) that will house a residence hall, dining facility, library and academic and classroom spaces. Construction on the new tower began in early 2021, with occupancy planned for

Lower Manhattan Real Estate Year in Review | 2021

fall 2023. The new tower replaces two buildings at 126132 Nassau Street and 15 Beekman Street that are now demolished.

The new building will serve as a replacement for Pace’s 50-year-old tower at One Pace Plaza East. 15 Beekman Street will be the third property SL Green has built for Pace in the neighborhood. The developer previously built dorm buildings at 33 Beekman Street in 2015 and 180 Broadway in 2013.

Infrastructure Brooklyn Bridge Bike Lane Opening and CitiBike Expansion In September, a new protected bike lane opened on the Brooklyn Bridge. The former Manhattan-bound vehicular lane was converted into a two-way bike lane with a concrete barrier between the bike and car lane. The former shared bike and pedestrian wooden walkway was converted to a pedestrian-only path. The new dedicated bike lane has proven popular. The first full month since opening, cycling ridership was up 88% from 2020 biking levels. The dedicated Brooklyn Bridge bike lane comes on the heels of the city adding a dedicated bike lane on Broadway in 2020.

CitiBike added its first station on the World Trade Center campus (at the corner of Church Street and Vesey Street).

The new station is in addition to the four stations added in 2020 bringing Lower Manhattan’s number of stations to 35.

NYC Ferry Adds Capacity

• In late summer, the NYC Ferry added a new route from

St. George in Staten Island with stops at the Vesey Street Pier in Battery Park City and Pier 79 Midtown West. Staten Island Ferry service still continues via the Whitehall Terminal.

• Additionally, in December, the Soundview route added a stop at Throgs Neck/Ferry Point Park in the Bronx, further connecting the Bronx to Midtown and Pier 11Wall Street.

• In early 2022, the NYC Ferry also began daily service to Governors Island via the South Brooklyn Route,

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The Ronald O. Perelman Performing Arts Center

•

expanding direct access from Pier 11/Wall Street.

Daily ferry service to Governors Island also continues via the Battery Maritime Building. The added ferry service to Governors Island coincided with the Island announcing it will be open year round.

concessions. The project will also plant street trees, rebuild sidewalks and enhance pedestrian safety from Whitehall Street to Old Slip.

I n 2022, the NYC Ferry will add a new Coney Island route with stops at Pier 11-Wall Street, Bay Ridge and Coney Island.

In late December 2021, the city released the Financial District and Seaport Climate Resilience Master Plan, a resilient infrastructure plan to protect Lower Manhattan from future flooding. The master plan is part of the larger Lower Manhattan Coastal Resiliency strategy, with active capital projects in Battery Park City, The Battery and Two Bridges. The plan calls for the creation of a two-level waterfront park that extends the shoreline of the East River by up to 200 feet.

Street Reconstruction Reconstruction of Front Street between Old Slip and John Street began in January 2020 and is scheduled for completion in Summer 2022. Planning has begun on the reconstruction of Nassau Street between Pine Street and Maiden Lane, Greenwich Street between Barclay and Chambers Streets and Vesey Street between Church Street and Broadway; though a construction start date is still being determined, the city aims for a 2024 completion.

These projects will replace all underground infrastructure, including water mains, sewers, electric, gas and other utilities, as well as construct new streets and curbs.

The city began work on the streetscape and public-realm enhancement project along the Water Street corridor in May 2021 and is estimated to be completed in 2023. The $22.8 million project will transform two temporary public plazas at Coenties Slip and Whitehall Street into permanent public spaces, featuring new landscaping, seating and

Lower Manhattan Real Estate Year in Review | 2021

Climate Resiliency

• The upper level will be elevated by 15 to 18 feet to

protect against severe storms, while doubling as public open space.

• The lower level will be a waterfront esplanade raised

three to five feet to protect against sea level rise, while offering access to the East River shoreline.

• The flood defense infrastructure is projected to cost $5 to $7 billion and could be in place by 2035, pending funding and prioritization by regulatory agencies.

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Parks and Open Space Elizabeth H. Berger Plaza Elizabeth H. Berger Plaza was unveiled to the public in early spring 2021. The $6.6-million project was first proposed in 2009, received approval in 2012 and began construction in September 2019. Named after the late Downtown Alliance president, the public space combines two existing, underutilized concrete plazas into a single large plaza and green space. The 29,000-sq.-ft. park eliminated an extraneous two-lane exit ramp for the Brooklyn Battery Tunnel and features a grass lawn, trees, landscaping, seating and paved pathways.

Peck Slip Park Construction was completed on the $5.6 million Peck Slip Park in early 2021. The project was proposed in 2017 and began construction in January 2020. The former Seaport parking lot features new pavers, seating and a variety of trees and plantings.

The Battery In late 2021, The Battery Playscape, a 1.4-acre playground, was unveiled. The $18.3 million playground, located across from the SeaGlass Carousel, replaces and triples the size of the former playground.

Plans were released for a 10-ft.-high flood wall to be located along the Battery Place entrance of The Battery.

The longest section (91 ft.) will rise from a planted berm at the base of Greenwich Street and extend to a raised Pier A plaza on the other. The wall will be located above the Battery Tunnel. Another smaller segment is also planned at nearby Wagner Park.

240 Greenwich Street BNY Mellon has been approved by the NYC Department of City Planning to create public space improvements to its global headquarters at 240 Greenwich Street.

The exterior streetscape improvements will be on all sides of the building, but the highlight will be Alexander Hamilton Place — a new landscaped pedestrian plaza featuring trees, planters, and public seating at the corner of Murray and West Streets. BNY Mellon hopes to begin construction in the first half of 2022.

Lower Manhattan Real Estate Year in Review | 2021

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Governors Island In the summer, the City Council approved plans to rezone 33 acres on the southern end of Governors Island.

The rezoning proposal will extend uses allowed in the historic northern portion of the island to support a yearround, 24/7 mixed-use district, while fully protecting the existing park and creating new open space as part of the new development. The southern island rezoning will support up to 4.2 million sq. ft. of new academic, commercial, cultural and hospitality uses, including new additional uses of research & development and light manufacturing. Bulk and height controls have also been put into place to preserve view corridors and support urban design principles. The Trust and the City have partnered to make available up to $150 million of capital funding that may be allocated to support this project.

The City and the Trust for Governors Island released a Request for Expression of Interest, or RFEI, to lease land within 33 rezoned acres for development of a leading climate solutions center. The global competition received submissions from a collection of 12 partnerships representing 30 different organizations, entities, businesses and universities vying to make the hub a reality. Four finalists were chosen: The City University of New York (CUNY) and The New School, Massachusetts Institute of Technology, Northeastern University, and Stony Brook University.

In late fall, Mayor de Blasio and the Trust for Governors Island announced that the 172-acre island will be open to the public year-round. The first winter season kicked off in late 2021 with a winter village, complete with ice skating and fire pits. In early 2022, the NYC Ferry also began daily service to Governors Island via the South Brooklyn Route, expanding direct access from Pier 11/Wall Street. Later this upcoming year, the Italy-based QC Terme Spas and Resorts will open QC NY, the spa’s first location outside of Europe, across three historic buildings at the northern tip of Governors Island.

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Census 2020 Reveals Lower Manhattan’s Population Grew By 33% Lower Manhattan’s population has grown amid a steady pace of new residential construction and office building conversions. According to the 2020 Census, Lower Manhattan’s population rose to 60,803 — 33% higher than in 2010 (45,739), and a massive four-fold increase from 2000 (14,449).

Since 2010, Lower Manhattan was the 4th fastest growing neighborhood in New York City and the fastest growing in Manhattan. According to the NYC Department of City Planning, the top 10 neighborhoods by percentage increase of population growth are: 1. Long Island City-Hunters Point — 198% 2. Downtown BK-Dumbo-Boerum Hill — 67% 3. Williamsburg — 41% 4. Financial District-Battery Park City — 33% 5. Midtown South-Flatiron-Union Sq. — 30% 6. Hell’s Kitchen — 30% 7. Chelsea-Hudson Yards — 26% 8. Fort Greene — 25% 9. Spring Creek-Starrett City — 25% 10. Queensbridge-Ravenswood-Dutch Kills — 22% Lower Manhattan Real Estate Year in Review | 2021

Indeed, Lower Manhattan added over 19,400 residential units since 2000 (5,300 since 2010) as the neighborhood has transformed itself from a nine-to five business district to a true 24-hour livework neighborhood. The pace of growth continued in 2021 as the neighborhood added over 500 new units, with nearly 4,000 more currently under construction or planned or development.

• The two census tracts east of Broadway and north of Liberty Street grew by 44%, adding a combined 5,700 people. Over the past decade, this pocket of Lower Manhattan has seen notable residential development with the openings of several large buildings, like 8 Spruce Street (899 units), 180 Water Street (565) and 19 Dutch Street (483).

• Battery Park City grew by 22%, adding over 2,800 people.

Detailed demographic data about Lower Manhattan’s new residents will not be published until the release of the 2021 American Community Survey (ACS).

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Alliance for Downtown New York 120 Broadway, Suite 3340 New York, New York 10271 The mission of the Alliance for Downtown New York is to provide service, advocacy, research and information to advance Lower Manhattan as a global model of a 21st century central business district for businesses, residents and visitors.

downtownny.com/research-statistics Lower Manhattan Real Estate Year in Review | 2021

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