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ALLIANCE FOR DOWNTOWN NEW YORK
Q2 2015
LOWER MANHATTAN REAL ESTATE MARKET OVERVIEW
COMMERCIAL OFFICE MARKET Leasing Activity Rising private sector employment and large, pending commercial leases indicate a strong commercial market in Lower Manhattan in the months ahead, even as year-to-date leasing drops from record levels in 2013 and 2014. Despite this, the vacancy rate has remained steady year over year at 10.3%.
moving to Lower Manhattan: Gucci finalized a lease for 83,964 square feet at 195 Broadway. The luxury retailer will be moving from Midtown in the first quarter of 2016. Several other large deals were announced in the second quarter at the World Trade Center but are not yet finalized. In June, 21st Century Fox and News Corp. signed a letter of intent with Silverstein Properties to anchor 1.3 million square feet in the future 2 World Trade Center. As part of the deal, Bjarke Ingels has been hired to redesign the proposed 80-story, 2.8 million square foot office tower in order to best serve the needs of the media and television companies. This deal has the potential to be the largest transaction in Lower Manhattan in 2015, and the company’s relocation would further cement Lower Manhattan’s status as a media center in New York City. At One World Trade Center, Moody’s is expected to announce a lease for 80,000 square feet, an addition to its current 836,902 square-foot Lower Manhattan footprint in the 100% leased 7 World Trade Center. A Moody’s expansion deal would mean that One World Trade Center is 66% leased (it is currently 63% leased).
According to CBRE, Lower Manhattan’s second quarter leasing activity totaled 860,000 square feet, 38% below the five-year average. Year-to-date leasing is also lagging historical averages; at 2.01 million square feet, activity is 24% below the five-year average. However, leasing activity is expected to accelerate in the second half of the year and to bolster 2015 annual totals. Several large deals have already closed in July, and several more are still pending. In early July, Ironshore finalized its lease for 101,958 square feet in 28 Liberty Street, which was previously announced in April 2015. Ironshore will be relocating and expanding from 50,000 square feet in 1 State Street. July also brought news of a major fashion icon
LOWER MANHATTAN LEASING ACTIVITY, Q2 2011 - Q2 2015 Source: Downtown Alliance, CBRE
2.0 Million 1.8 Million
5-Year Quarterly Average: 1.38 Million 5-Year Quarterly Average: 1.38SF Million SF
1.6 Million
SF SF Leased Leased
1.4 Million 1.2 Million 1.0 Million
860,000
0.8 Million 0.6 Million 0.4 Million 0.2 Million 0.0 Million
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Lower Manhattan Real Estate Year in Review | Q2 2015
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