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ALLIANCE FOR DOWNTOWN NEW YORK

LOWER MANHATTAN REAL ESTATE MARKET REPORT CHANGE IN OCCUPANCY TAMI 2008 - 2018

10

10 pts FIRE

20 pts GOVT

6 pts PROF

3 pts FASHION

1 pt EDU

2 pts

Q3 2018 HEALTH

1 pt

Years After the Financial Crisis, Lower Manhattan Office Occupancy is More Diverse than Ever.

Lower Manhattan’s office occupancy experienced a dramatic transformation in the ten years since one of the worst financial crises in history rocked the market. The Finance, Insurance and Real Estate (FIRE) industry’s historic dominance of Lower Manhattan’s office market has given way to a more diverse tenant mix. Lower Manhattan’s economy is more vibrant and dynamic today than at any time in the more than twenty years since the creation of the Downtown Alliance. These changes have transformed the culture and composition of Lower Manhattan’s office buildings. According to Jones Lang LaSalle, FIRE’s share of occupancy has dropped from 55 percent in 2008 to just over a third today (35 percent). Meanwhile, other industries have filled in the gap and then some, helping to drive private sector employment to 243,800, its highest level since September

RBC J.CREW GOLDMAN SACHS AMEX MEREDITH JONES DAY COLLEGE BOARD

CONDÉ NAST SPOTIFY

11, 2001. Most notably, the Technology, Advertising, Media and Information sectors (TAMI) occupy triple the share of space today that they did in 2008 - 5 percent vs 15 percent. A flurry of nonprofit, healthcare, and professional services companies have moved to Lower Manhattan helping to grow these sectors’ share of the office market as well. This transformation is evident in buildings across the district. The World Trade Center campus (One, 3 and 4 World Trade Center) is currently 41 percent leased to TAMI companies, a significant shift from the makeup of the original twin towers where less than 5 percent of space was occupied by these types of tenants. Today, each tower in the World Trade Center campus has a TAMI anchor tenant. 195 Broadway is nearly entirely leased to the creative and technology industries. Brookfield Place, once dominated by banks and financial firms such as Merrill Lynch, Nomura Holdings and others, counts

IEX

MEDIAMATH

SPORTSNET

companies like the Associated Press, the Meredith Corporation (formerly Time Inc.), the College Board and J.Crew as some of its biggest occupants. This diversification is also apparent in employment trends. Professional Services employment is at its highest level in LM since at least 2001 - 51,332 employees, up nearly 50 percent since the depths of the recession in 2009. Information sector employment, which includes jobs in media and publishing, is just 5 percent off from its most recent peak in 2001 with 12,083 employees today. If you work in Lower Manhattan today, you’re almost as likely to be working in Information or Professional Services as you are in Financial Services or Insurance. The timeline illustrates the milestones in Lower Manhattan’s office market diversification and the post-2008 economic expansion.

TEACH FOR AMERICA

MACMILLAN

ESPN

PLANNED PARENTHOOD

LAMDA LEGAL

MCKINSEY & CO MM.LAFLEUR HARPERCOLLINS VOX MEDIA MCGRAW-HILL GROUP M OMNICOM GUCCI BOOKING.COM HUGO BOSS REVLON

Photo: iStock, By Getty Images. Trace Rouda.

Lower Manhattan Real Estate Market Report | Q3 2018

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THIRD QUARTER LEASING DIPS AFTER BANNER SECOND QUARTER Following an above average second quarter, new leasing activity slowed with just 726,000 square feet of new deals inked in the third quarter. With this below-average quarter, year to date activity is now 24 percent below the level at this time last year. Despite this, several pending deals announced in the third quarter, but not yet officially closed are expected to boost yearend totals and close the year on par with the historical average. Elsewhere in Manhattan, leasing slowed slightly in Midtown and Midtown South, but both markets remain on track to best 2017’s year-end totals. More than 266,000 square feet of new deals were announced in the third quarter but have yet to close. The NYPD is in negotiations for 106,000 square feet in 375 Pearl Street. Spotify is expected to close on a 85,666-square-foot expansion that will bring their footprint in 4 World Trade Center to 564,000 square feet. With this expansion, Spotify will be the largest tenant in 4 World Trade Center and the second largest overall World Trade Center campus tenant behind Condé Nast. Also, the London Stock Exchange is expected to close on a deal to relocate from Midtown to 75,000 square feet in 28 Liberty Street. Finally,

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MAJOR PROJECTS UPDATE

BounceX, one of the fastest growing software companies in the United States, signed a deal to relocate from Times Square and expand to a 79,118-square-foot office in One World Trade Center in early October.

NEW LARGE DEALS SCARCE BUT TAMI AND FLEXIBLE SPACE PROVIDERS STILL ACTIVE Technology, Advertising, Media and Information (TAMI) and Flexible Space Providers continued to be Lower Manhattan’s strongest dealmakers in the third quarter, now accounting for more than 43 percent of all new activity year to date. While more active south of Chambers Street than the Midtown market, these industries are currently the majority of new activity in Midtown South, accounting for more than 76 percent so far this year.

“For us, the decision was simple. All of our clients in digital media continue to move down here.” -Michael Pallad, President - Undertone

LOWER MANHATTAN YEAR TO DATE LEASING ACTIVITY, 2013 - 2018 Source: CBRE

6 Million 5.2 Million

Square Feet

5 Million 4 Million

4.5 Million 3.9 Million 3.4 Million

3.4 Million 2.9 Million

3 Million 2 Million 1 Million 0

2013

2014

Lower Manhattan Real Estate Market Report | Q3 2018

2015

2016

2017

2018

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Activity RETAILby Industry

OFFICE

Fashion & Retail Trade

TOURISM & HOSPITALITY

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FIRE Professional 14.5% NEW LEASING ACTIVITY BY INDUSTRY, 2018 YEAR-TO-DATE AND 2017 OVERALL 18.1% Services Source: Jones Lang LaSalle 1.0%

Education, Healthcare & Nonprofit

Government

Other Services 3.2%

Education, Healthcare & Nonprofit Other Services 3.7%

10.7%

2.7%

Fashion & Retail Trade

12.5%

Flexible Space Providers

7.3%

TAMI

2018

Year-to-Date New Leasing Activity by Industry

3.9%

27.0%

35.2%

Fashion & Retail Trade

31.9%

2017

New Leasing Activity by Industry

FIRE

1.0%

Professional Services 12.8%

FIRE

15.6%

TAMI

Government

Professional Services 18.1%

14.5%

*By square-footage

*By square footage

LOWER MANHATTAN TOP LEASES, Q3 2018 Source: Downtown Alliance, CBRE, JLL, CoStar, Colliers International

Tenant Name

Location

Education, Healthcare & Nonprofit

Other Services 3.2%

10.7% SF Transaction Type Government Leased 2.7%

Sector

TAMI

Professional Services, Flexible Office Space Providers

1

WeWork

85 Broad Street

76,814 Fashion &Expansion

2

Broadcast Music, Inc

7 World Trade Center

61,390

3

Emmet Marvin & Martin LLP

120 Broadway

4

Knotel

110 William Street

Nonprofit Year-to-Date Flexible New Leasing Professional Services, Legal 53,314 Space Renewal Activity by Providers Professional Services, Industry 36,848 New LM Location 7.3%

5

Rafeal Vinoly

375 Pearl Street

36,550

6

Posse Foundation, Inc

14 Wall Street

Relocation Professional 12.8% Services Renewal and 36,345

7

Cision (PR Newswire)

200 Vesey Street

33,866

8

National Debt Relief

180 Maiden Lane

30,548

Expansion

FIRE

9

Undertone

One World Trade Center

25,550

Relocation

TAMI, Technology

10 Framestore

61 Broadway

24,479

Relocation

TAMI, Technology

11 Pace University

52 Broadway

23,041

New LM Location

Education

12 PR Consulting Group, Inc 100 Wall Street

19,645

Relocation

TAMI, Public Relations

13 Fundera

123 William Street

19,051

Renewal and Expansion

FIRE

101 Greenwich Street

18,089

Renewal

Professional Services, Legal

100 Broadway

17,625

Relocation

TAMI, Advertising

14

Morris Duffy Alonso & Faley

15 Barton F Graf

Lower Manhattan Real Estate Market Report | Q3 2018

Retail Trade

Renewal 12.5%

2018

35.2%

Flexible Office Space Providers

Expansion

Relocation *By square footage

Professional Services, Design

FIRE

Nonprofit

15.6%

TAMI, Media

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WeWork was especially active Manhattan-wide in the third quarter and announced their new ranking as the largest private occupier of space in Manhattan overall with over 5.3 million square feet. In Lower Manhattan, the company has seven locations. They signed the largest third quarter deal when committing to a 76,814-square-foot expansion in 85 Broad Street. The 319,000 square foot location is the company’s largest in Lower Manhattan. Knotel inked the second largest deal of the quarter with their plans to open a fourth location in 110 William Street. The expanding flexible space company signed a lease for 36,848 square feet on the 17th floor. Lower Manhattan also recorded several smaller relocation commitments from TAMI companies. PR Newswire, a press release distributor and communications company, will be relocating from Hudson Square to 33,866 square feet in 200 Vesey Street at Brookfield Place. They will join Associated Press, a fellow media company, in the building. The World Trade Center remains a draw for technology and advertising companies. Undertone, a digital advertising firm, inked a deal for 25,550 square feet on the 77th floor of One World Trade Center. Framestore, a motion picture visual effects company, is relocating from SoHo to a 24,479-square-foot floor in 61 Broadway. Other recent TAMI relocations signed at 61 Broadway in 2018 include Hello Alfred, a digital personal and home services manager, and Collibra, a data governance platform company.

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MAJOR PROJECTS UPDATE

NONPROFIT AND EDUCATION TENANTS RENEW AND EXPAND LOWER MANHATTAN ROOTS Other deals signed this quarter reflect Lower Manhattan’s ongoing appeal to existing tenants especially in the nonprofit and education sectors. Posse Foundation, a nonprofit leadership training organization renewed and expanded by 10,000 square feet at 14 Wall Street. They will now occupy an entire 36,345-square-foot floor. Pace University signed a lease for 23,041 square feet in 52 Broadway, also home to King’s College, to expand classroom space for their Actors Studio Drama School. Finally, the Hawthorne School, a school focused on children and adults with autism and other developmental disabilities, expanded by 12,261 square feet in 156 William Street, also home to The Blue School.

TAMI RELOCATIONS DOWNTOWN Q3 2018

RAFAEL VINOLY ARCHITECTS JOINS 100+ ARCHITECTURE AND DESIGN FIRMS SOUTH OF CHAMBERS STREET One of New York City’s most well-known architecture firms, Rafael Vinoly Architects, committed to move to 375 Pearl Street after 28 years in Hudson Square. The designer of 432 Park Avenue will relocate to the 36,550-square-foot top floor in the recently repositioned tower. Lower Manhattan has welcomed a steady stream of architecture and design firms relocating from Midtown South in recent years including CetraRuddy, CallisonRTKL, Morris Adjimi Architects and Cooper Robertson Partners.

TWO OF THE MOST IMPORTANT NAMES IN DIGITAL MUSIC ARE LOCATED IN THE WTC In the third quarter, Broadcast Music, Inc. (BMI), a music royalty, publishing and licensing organization, signed the largest renewal of the quarter at 7 World Trade Center for 61,390 square feet. The music rights management organization has been located in Lower Manhattan since 2010 after relocating from Midtown. BMI licenses much of the music played by Spotify, which is headquartered in nearby 4 World Trade Center.

Lower Manhattan Real Estate Market Report | Q3 2018

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VACANCY RATE UP TO 12 PERCENT WITH CLASS A ADDITIONS

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percent, according to Cushman & Wakefield. Nationwide, the overall average vacancy rate among central business districts is 12.5 percent, up slightly year-over-year and each Manhattan submarket remains tighter than the national average.

In the third quarter, the vacancy rate increased slightly to 12 percent, rising for the third consecutive quarter, according to Cushman & Wakefield. Space additions in properties such as 28 Liberty and 32 Old Slip as well as below-average quarterly leasing activity pushed the rate up from 11.3 percent in the second quarter.

While sublet space has increased in Lower Manhattan over the past year, the market’s sublet vacancy rate of 1.5 percent still remains slightly below that of Midtown and Midtown South - 1.8 percent.

The majority of the largest blocks of space remain in the World Trade Center and the Financial East submarkets, which account for about two-thirds of all available space. With the addition of 28 Liberty and 32 Old Slip, the Financial East submarket experienced a 16 percent expansion in available space. Other large blocks in this submarket include 55 Water Street (269,764 square feet) and 120 Broadway (203,749 square feet).

Overall Vacancy Rate Lower Manhattan

Meanwhile, overall vacancy rates in Midtown and Midtown South are basically stable year-over-year. Midtown’s overall vacancy rate is down less than a percentage point from this time last year to 9.2 percent, and Midtown South is holding steady at 7.4

Manhattan

12% 12.5%

OVERALL VACANCY BY SUBMARKET, Q3 2013 - Q3 2018 Source: Cushman & Wakefield

13.0% 12.0%

12.0% 11.0% 10.0%

9.2%

9.0% 8.0%

7.4%

7.0% 6.0% 5.0%

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013

2014

2015

Lower Manhattan

Lower Manhattan Real Estate Market Report | Q3 2018

2016 Midtown

2017

2018

Midtown South

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AVERAGE ASKING RENT REACHES NEW PEAK IN LOWER MANHATTAN WITH STRONG SUPPLY OF CLASS A SPACE ON THE MARKET Lower Manhattan’s overall average asking rent reached a new peak for the second consecutive quarter as it crept up to $63.70 per square foot. This rise can largely be attributed to the addition of higher priced Class A space at 28 Liberty and 32 Old Slip to the market. This pushed the average Class A asking rent to a market high as well, reaching $67.20 per square foot, up 6.8 percent year-over-year. Similarly, the average Class B asking rent remains near its historical high at $55.40 per square foot. Midtown South trended in the same direction, with its overall average asking rent reaching $76.40, a new historical high for the market and also trumping Midtown’s overall average asking rent for the first time in the markets’ history. Midtown South’s average Class A asking rent jumped 10 percent in the third quarter to $93.40 due to the completion of several new Class A office buildings in the Meatpacking/Chelsea area.

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rents in Lower Manhattan and Midtown has narrowed to the closest point since the beginning of 2004; Lower Manhattan’s average Class A rent is $15.60 below Midtown’s average. At the same time, the average Class A asking rent for available Lower Manhattan space offers the greatest discount in the market’s history as compared to availabilities in Midtown South. Lower Manhattan’s Class A average asking rent is $26 per square foot below the average asking rent for space on the market in Midtown South.

Class A Asking Rents Lower Manhattan

$67.20

Midtown

Midtown South

$82.80 $93.40

Lower Manhattan Class A Rents

$15.60 PSF

Below Midtown

After a strong third quarter of new leasing activity, Midtown overall average asking rent fell due to an influx of lower-priced sublease space entering that market at the same time as direct available space is at its lowest level in several years. As a result of these changes, the difference between average Class A asking

$26.20 PSF

Below Midtown South

CLASS A RENTS BY SUBMARKET, Q3 2013 - Q3 2018 Source: Cushman & Wakefield

$100.00

$93.40

$90.00

$82.80

$80.00 $70.00 $67.20

$60.00 $50.00 $40.00

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013

2014

2015 Lower Manhattan

Lower Manhattan Real Estate Market Report | Q3 2018

2016 Midtown

2017

2018

Midtown South

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THIRD QUARTER PROPERTY SALES Lower Manhattan’s property sales market remained subdued in the third quarter.

OFFICE Lower Manhattan logged two office transactions in the third quarter. The largest transaction was executed for 101 Barclay. The Bank of New York Mellon purchased the land underneath 101 Barclay for $352 million from the City of New York. The bank has owned the building since the early 1980’s and recently consolidated its 4,500 employees there after relocating operations from Brookfield Place. This marks the largest property transaction in Lower Manhattan year-to-date and a strong vote of confidence in Lower Manhattan by BNY Mellon.

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The Shapiro Group purchased 21 Park Place, a 9,686-squarefoot building, for $9 million or about $929 per square foot, from the Lions Group NYC. Most recently, the building has been used as a retail property. Tents & Trails had occupied the base of the building since the early 1970’s before closing earlier this year. The new owners plan to redevelop the property but exact plans remain unknown.

MULTIFAMILY In August, Brookfield Asset Management announced (but has not yet closed on) its purchase of Forest City Realty for $6.8 billion. This transaction will also include the trade of 8 Spruce Street, a 903-unit luxury rental tower completed in 2012. This deal estimates the value of the rental tower at $520 million or about $576,000 per unit.

Great Empire Realty purchased the Down Town Association Building at 60 Pine Street for $28.3 million or $575 per square foot from the Down Town Association in a sales-leaseback transaction. The 49,000-square-foot office building is fully occupied by the Down Town Association.

HOTEL Urban Commons, a Los-Angeles based real estate firm, purchased the 298-room Wagner Hotel at the base of 2-10 West Street, for $147.3 million or about $494,000 per hotel room from Westbrook Partners and Millennium Partners. The hotel was previously branded as a Ritz-Carlton Hotel, and Westbrook and Millennium Partners rebranded it to the Wagner Hotel, an independent brand. The rest of the building contains 120 condominium units which were previously branded as RitzCarlton residences. This transaction is the third closed hotel transaction in Lower Manhattan in 2018.

RETAIL After a quiet first half of the year for retail trades, two transactions closed in the third quarter. Maxim Capital Group, purchased a 3,451-square-foot retail condominium at the base of 108 Chambers Street, an 8-unit residential condominium building expected to be complete in mid-2019, from the building’s developer, Greystone Development. The transaction closed at $10 million, valuing the retail space at $2,898 per square foot. The building’s retail condominium is already in operation with Vitamin Shoppe and Starbucks at the base of the building.

Lower Manhattan Real Estate Market Report | Q3 2018

101 Barclay Street BNY Mellon purchased the land underneath their already-owned headquarters at 101 Barclay, signalling their confidence in Lower Manhattan.

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RETAIL MARKET New Openings and Announcements Lower Manhattan retail continued to expand in the third quarter of 2018. Pier 17 opened in the Seaport District and a variety of new retailers opened across the district. By the end of 2019, Lower Manhattan will have more than 7.28 million square feet of retail -- an expansion of 2.92 million square feet since 2014.

Westfield World Trade Center recently welcome a second Starbucks and Toytoise, a toy store. Just Baked!, a bakery and sandwich shop, and Gloveworx, a boxing studio, are expected to open by the end of the year. With the June opening of 3 World Trade Center and the surrounding plaza spaces, an entirely new street level restaurant collection is on the horizon. Over 75,000 square feet of retail and restaurant space will open in 2019. At Brookfield Place, popular seafood eatery Seamore’s joined other restaurants along Vesey Street in early July and La Maison du Chocolat opened overlooking the Winter Garden. Madewell announced it will open this fall. Sant Ambroeus, the fashionable Italian restaurant, is expected to open early next year. The Seaport District had a busy summer with a number of shops and eateries opening. The Pier 17 rooftop concerts by Live Nation began in August to much fanfare, while various pop ups and activations are underway. 10 Corso Como opened a 28,000-square-foot concept shop, the first in the U.S., in the Fulton Market Building. In addition to fashion, design and books, the space includes a cafe and art gallery. Additionally, the SJP Collection, a shoe boutique by Sarah Jessica Parker, and long-term pop-ups by Roberto Cavalli and Cynthia Rowley opened. Big Gay Ice Cream, by CHLOE., a vegan fast-casual eatery, and Cobble & Co., a gastropub, opened along Front Street. Restaurants by Jean-Georges Vongerichten, David Chang and Andrew Carmellini and Malibu Farm are expected to open in phases in late 2018/early 2019. With 27 new retailers opening in Lower Manhattan in the third quarter, the district now has 1,187 stores and restaurants. The eateries and retailers that opened or were announced in the third quarter include:

Courtesy of Seaport District

Pier 17 debuted its concert series, in partnership with Live Nation, in the Seaport District.

Photo by Brett Wood Courtesy of 10 Corso Como

10 Corso Como opened its first concept shop in the U.S. in the Seaport District.

• Alamo Drafthouse announced it will open its second NYC movie theater in the lower levels of 28 Liberty Street in late 2019. The 40,000-square-foot dine-in multiplex will have 14 screens and a separate bar; • Brooklyn Chop House, an Asian steakhouse, opened at 150 Nassau Street; • Ambassador, a Japanese fashion and design boutique, opened at 49 Warren Street in TriBeCa; • QB House, a barber shop hailing from Tokyo, opened at 18 John Street; and • Fast casual eateries continued to expand across Lower Manhattan, including Taïm at 75 Maiden Lane, The Kati Roll Company at 22 Maiden Lane and Proper Food at 67 Wall Street.

Lower Manhattan Real Estate Market Overview| Q3 2018

Photo by Katie Foster, Courtesy of Seamore’s

Seamore’s welcomed guests to its new Brookfield Place location at 250 Vesey Street.

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TOURISM & HOSPITALITY Record Year for Tourism Lower Manhattan continues to be a growing destination for tourists. In 2017, approximately 13.6 million tourists visited Lower Manhattan, up nearly eight percent from 20161. An estimated 17.4 million unique visitors (a figure that includes residents of New York City and the surrounding area who don’t work or live in Lower Manhattan) visited the district in 2017 — a 17 percent increase from 2016. Visitors from throughout the city and the tri-state area were likely drawn to well publicized new destinations such as the Oculus and Brookfield Place. As a whole, New York City welcomed a record number of 62.8 million tourists in 20172. This was an increase of 2.3 million over 2016.

Hotels Check-in to Lower Manhattan At the end of the third quarter, there were 7,118 rooms in 33 hotels throughout Lower Manhattan. Three hotels are expected to open before the end of 2018:

• The AC Hotel New York Downtown, at 151 Maiden Lane, recently opened in mid-October with 271 rooms. The hotel will also feature an independent restaurant to be announced at a later date; • The Moxy NYC Downtown, at 26 Ann Street, opened in late October with 298 rooms. The hotel also features Recreation, a coworking space by day and cocktail bar by night; and • T he Artezen Hotel, will bring 89 hotel rooms to 24 John Street and will have a Ground Central coffee shop at the base.

Courtesy of AC Hotel New York Downtown

The AC Hotel New York Downtown opened at 151 Maiden Lane with 271 hotel rooms. An independent restaurant will also be at the hotel’s base.

With 12 hotels and 1,900 hotel rooms under construction or in the development pipeline (including the 658 rooms in three hotels expected to open in the remainder of 2018), inventory is expected to increase by up to 27 percent in the next few years. If all projects continue as planned, the hotel inventory in Lower Manhattan will reach 9,019 rooms in 45 hotels by 2020.

27% 1 2

Increase in Hotel Rooms in Lower Manhattan by 2020+

Source of Lower Manhattan tourism estimates: Audience Research & Analysis Source of New York City-wide tourism figures: NYC & Company

Lower Manhattan Real Estate Market Overview| Q3 2018

Courtesy of Moxy NYC Downtown

The Moxy NYC Downtown opened this fall at 26 Ann Street with 298 hotel rooms. The hotel will also feature Recreation, a cocktail bar and coworking space.

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Occupancy and Average Daily Room Rate The third quarter’s average occupancy rate was 87.2 percent -- three percentage points below the citywide average1. The occupancy rate of Lower Manhattan hotels decreased by three percentage points from Q3 2017. This is the second consecutive quarter where occupancy has decreased year-over-year, both by three percentage points. While occupancy has trended down, average daily room rate (ADR) is going the other direction. This is the second consecutive quarter where Lower Manhattan’s ADR increased year-over-year. In the third quarter of 2018, ADR in area hotels was $266, up one percent year-over-year. New York City’s ADR1, about $20 more than Lower Manhattan’s ADR, also increased slightly, by 2.4 percent year-over-year to $287.

$266 87%

Hotel Occupancy Rate in Lower Manhattan, Q3 2018

Lower Manhattan Real Estate Market Overview| Q3 2018

MAJOR PROJECTS UPDATE

LOWER MANHATTAN HOTEL DEVELOPMENT PIPELINE Source: Downtown Alliance

Positive signs on the horizon include growing tourism, expanded retail and restaurant offerings, and new and repositioned office product which are expected to continue to drive business and leisure travel to Lower Manhattan. The positive outlook for demand generators and a slowdown in citywide hotel development are encouraging hotels to push room rates higher, despite a modest dip in occupancy year-over-year. Additionally, efforts to regulate the booming home-sharing industry, including legislation recently adopted by the New York City Council, could reduce the availability of units listed by companies such as Airbnb. This could shift some demand and pricing power back to the hotel market especially on key sellout nights.

Average Daily Room Rate in Lower Manhattan, Q3 2018

RESIDENTIAL

Hotel & Address

Owner/ Developer

Rooms

Floors

Open Date

1

The Artezen Hotel 24 John Street

Westbury Realty Associates

89

21

2018

2

AC Hotel NYC Downtown

151 Maiden Lane

Fortis Property Group

271

26

2018

3

Moxy NYC Downtown

Tribeca Associates

298

30

2018

4

The Fidi Hotel 11 Stone Street

Premier Emerald LLC

143

27

2019

5

Marriott Residence Inn

Lam Group

120 (upper floors)

40

2019

6

Courtyard by Marriott

Lam Group

200 (lower floors)

40

2019

120-122 Water Street

Atlas Hospitality

122

31

2019

8

Hotel Indigo

8-12 Maiden Lane

10-12 MLane Inc.

190

25

2020

9

Aloft Hotel

Fit Investment Group

173

29

2020

10 Battery Maritime Building

Boutique Hotel

Centaur Properties/ Cipriani

41

5

2020

Hotel 11 TBD 265 Broadway

Roe Corporation

80

12 (of 42)

2020

174

14

TBD

7

26 Ann Street

215 Pearl Street 215 Pearl Street

Hotel Indigo

50 Trinity Place

TBD Hotel Clarion 12 American Stock Partners/ GHC Dev. Exchange Building Total Hotels in the Pipeline Total Hotel Rooms in the Pipeline 1

12 1,901

Source of New York City-wide hotel figures: CBRE Hotels / STR

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RESIDENTIAL

MAJOR PROJECTS UPDATE

RESIDENTIAL MARKET Inventory and Development Continue to Expand Lower Manhattan has over 33,100 units in 334 mixed-use and residential buildings. The estimated population of approximately 61,000 held steady over the past year as several anticipated openings were delayed. Across existing residential buildings, approximately 59 percent are rentals, 35 percent are condos/co-ops and six percent have an unknown tenure. Over 2,670 units in 20 buildings are currently under construction or planned for development (75 percent condo and 25 percent rental). During the third quarter, three residential buildings with 1,173 units opened and began welcoming residents. Full lease-up and occupancy are expected one year from now. They include:

• 111 Murray Street - Fisher Brothers and the Witkoff Group’s 62-story, 157-unit condo tower opened in August. The building was the site of a former St. John’s University building; • 19 Dutch Street - Carmel Partners is starting to wrap up construction on its 64-story, 483-rental unit tower. The Fulton Street tower’s first residents moved in this summer and the building will continue to open in phases throughout the next twelve months; and • 2 0 Broad Street - MetroLoft’s conversion of a 27-story office building adjacent to the New York Stock Exchange welcomed its first set of residents in September. The building will have 364 rental apartments and 169 short-term rentals operated by Sonder, a hospitality company. In addition, there will be 70,000 square feet of retail. Full occupancy is expected in the next 14-18 months. Two additional buildings are expected to open before year’s end:

• 19 Park Place - The narrow 21-story, 24 condominium tower, developed by ABN Real Estate, is wrapping up construction and expects a temporary certificate of occupancy in late 2018; and • 49 Chambers Street - The Chetrit Group’s conversion of the the historic Emigrant Savings Bank anticipates closings to begin this November, adding 99 condo units to the market.

LOWER MANHATTAN RESIDENTIAL DEVELOPMENT Source: Downtown Alliance

Address & Building Name Condo Units Under Construction

Lease & Building Type TOTAL

Open Date

2,069

19 Park Place

Condo New Construction

24

2018

49 Chambers Street 1 Beekman Street

Condo Conversion

99

2018

Condo New Construction

31

2019

4

30 Warren Street

Condo New Construction

23

2019

5

81 Warren Street

Condo New Construction

12

2019

8

2019

1 2 3

6 7

108 Chambers Condo Street New Construction 161 Maiden Lane Condo 1 Seaport

New Construction

80

2019

8

125 Greenwich Street

Condo New Construction

273

2019

9

45 Park Place

Condo New Construction

50

2019

Condo New Construction

110

2019

Condo New Construction

24

2020

12 Street

Condo New Construction

90

2020

13 One Wall Street

Condo Conversion

566

2020

14 Street

130 William

Condo New Construction

244

2020

15 45 Broad Street

Condo New Construction

206

2021

16 Street

Rental/Condo New Construction

229

2021

Condo & Rental Units In Development

TOTAL

606

10 23-31 Park Row

69 West

11 Broadway

77 Greenwich Former Syms site

75-83 Nassau

1

267 Broadway

Hotel/Condo New Construction

37

2020

2

185 Broadway

Rental New Construction

279

2021

3

86 Warren Street

Rental New Construction

40

TBD

4

3 Platt Street 102 John Street

Rental New Construction

92

TBD

TOTAL UNITS IN THE PIPELINE

Lower Manhattan Real Estate Market Overview| Q3 2018

Units

2,675

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OFFICE

RETAIL

TOURISM & HOSPITALITY

RESIDENTIAL

MAJOR PROJECTS UPDATE

Residential Rental Market Metrics According to residential statistics published by Miller Samuel/Douglas Elliman, the median rent in Lower Manhattan increased slightly to $3,795, up 1.5 percent from this time last year. Meanwhile, Manhattan’s overall median rent also trended up slightly, at 0.9 percent year-over-year to $3,445.

Residential Sales Market Cools Slightly Continued fluctuation and correction in the residential sales market in Lower Manhattan reflected the expiration of the legacy contract pipeline for condos, as well as rising mortgage rates and downward pressure from the recent tax overhaul. Similar trends are being seen across Manhattan overall. The median sales price for co-ops and condos dropped to $931,500, down nearly 7.5 percent from last quarter and 30 percent from the previous year. This is the first time since the first quarter of 2016 that the median sales price fell below $1 million. Similarly, while Lower Manhattan’s average price per square foot (PPSF) of $1,285 saw a decrease of ten percent over the past quarter, the year-over-year decrease was around 28 percent.

Fisher Brothers & the Witkoff Group’s 62-story 111 Murray Street opened with 157 condo units.

The Blue School Expands The Blue School, an independent private school founded by members of The Blue Man Group, has expanded into an additional space at 156 William Street, a few blocks west from the original 241 Water Street location in the Seaport. The new, four-story, 45,000-square-foot space serves students in the 4th through 8th grade and features flexible classrooms, library, STEAM lab, a gymnasium that doubles as an auditorium and commons area with a microgreens garden. The original 241 Water Street location now serves pre-K through 3rd grade. The new expansion will allow the school to double its capacity to 600 students over the next decade.

Photo by Albert Vecerka/Esto for the Blue School

Lower Manhattan Real Estate Market Overview| Q3 2018

Carmel Partners opened its 64-story, 483-unit rental tower at 19 Dutch Street this past summer.

Metroloft’s conversion of 20 Broad Street into 533 rental units welcomed its first residents in early fall.

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OFFICE

RETAIL

TOURISM & HOSPITALITY

RESIDENTIAL

MAJOR PROJECTS UPDATE

LOWER MANHATTAN MEDIAN RESIDENTIAL RENT, 1Q 2015 - 3Q 2018 Source: Miller Samuel/Douglas Elliman

LOWER MANHATTAN MEDIAN CONDO SALES PRICE, 1Q 2015 - 3Q 2018 Source: Miller Samuel/Douglas Elliman

This was the first time since Q1 2016 that median condo sales prices fell below $1 million.

LOWER MANHATTAN AVERAGE SALES PRICE PER SQUARE FOOT (PPSF), 1Q 2015 Source: Miller Samuel/Douglas Elliman

Lower Manhattan condo sales are returning to normal patterns as the luxury legacy contracts - 3Q 2018 empty.

Lower Manhattan condo sales are returning to normal patterns as the luxury legacy contracts empty.

Lower Manhattan Real Estate Market Overview| Q3 2018

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OFFICE

RETAIL

TOURISM & HOSPITALITY

RESIDENTIAL

MAJOR PROJECTS UPDATE

MAJOR PROJECTS UPDATE WTC Cortlandt 1 Station Reopens

74 Trinity Place

The WTC Cortlandt 1 Train station officially reopened after being destroyed on September 11, 2001, forcing trains to bypass the station for over 17 years. The remodeled station features a white, monochromatic marble mosaic with text from the 1776 Declaration of Independence and the 1948 United Nations Universal Declaration of Human Rights. The station opens directly into the west side of the World Trade Center Transportation Hub. Separately, entrances from the new 3 World Trade Center tower into the transit hub are expected to open by the end of next June.

Trinity Real Estate’s 74 Trinity Place, a new 26-story, 310,000-squarefoot office building, has begun to rise. The bottom five floors will be for community use, floors six through eight will be used for Trinity Church’s offices and the remaining 17 floors will be rentable office space. The existing pedestrian bridge across Trinity Place will remain and eventually be reconnected to Trinity Church. The $350-milliontower is expected to open in 2020.

The Ronald O. Perelman Performing Arts Center at the World Trade Center (The Perelman Center) The Ronald O. Perelman Center for Performing Arts at the World Trade Center, known as The Perelman Center, signed a 99-year lease with the Port Authority in February 2018. The Center has raised $295 million, or 82 percent of its expected $363 million construction cost. In conjunction with the lease signing, the Port Authority will also receive $48 million from the Lower Manhattan Development Corporation for below-grade construction. Additionally, the board of directors of the Perelman Center announced the appointment of its first artistic director, Bill Rauch of the Oregon Shakespeare Festival. The approximately 110,000-square-foot 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 Perelman Center will be located at the site of the now demolished PATH entrance at Greenwich and Vesey streets, which closed when the World Trade Center Transportation Hub opened in summer 2016. The project began construction in fall 2017 and anticipates opening for the 2020-2021 season.

MTA Reopened the New WTC Cortlandt Station, Bringing the 1 Train Back to the World Trade Center

NYC Ferry Expands Service The final two of the six NYC Ferry routes launched this summer with service to the Lower East Side and Soundview (Bronx). The other routes include the pre-existing East River Ferry service and lines to the Rockaways, South Brooklyn and Astoria. These new routes have proven popular, as ridership hit 4.8 million cumulative riders since the service launched in May 2017. Due to the better than anticipated demand, additional funds have been allocated to pay for larger boats, a second home port and other infrastructure upgrades to accommodate increased rider projections. These routes have 20 landings across the city, including a newlyannounced homeport landing at the Brooklyn Navy Yard that will be part of the East River Route. All routes stop at Pier 11-Wall Street. One-way tickets cost $2.75.

Curious About Ongoing Construction? The Downtown Alliance continues to educate our constituents about ongoing construction developments throughout Lower Manhattan beyond our quarterly real estate reports. LM3D gives planners, investors, residents and all neighborhood stakeholders an unparalleled way to visualize the development taking place in Lower Manhattan. LM3D’s tools allow users to search for information on an individual building, a select area or to analyze land use across the neighborhood. New on our website are a series of development maps that are divided by geography and include addresses, estimated height, potential uses and expected completion date for individual projects. These maps also highlight ongoing public construction projects. They include (links below):

Courtesy of the Metropolitan Transportation Authority

Lower Manhattan Real Estate Market Overview| Q3 2018

• Fulton Street area • Greenwich Street South area • New York Stock Exchange area • World Trade Center & Greenwich Street North area

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Visit www.downtownny.com/research-statistics for additional publications on the Lower Manhattan real estate market and economy. Documents include a complete list of residential and hotel developments, available retail spaces, a summary of leasing incentives and other research reports, including:

Lower Manhattan Real Estate 2017 Year in Review, an annual real estate report providing a review of commercial office, retail, residential, hospitality and development projects happening in 2017. Lower Manhattan: New York City’s Premier Transit Hub, a report demonstrating the strength of Lower Manhattan as one NYC’s premier multimodal hubs and needs/opportunities for future improvements. An Untapped Market: Lower Manhattan’s Young Professionals, a residential survey highlighting Lower Manhattan as a neighborhood of choice for young professionals in New York City, as well as ways to capture residents’ robust appetite for dining out and entertainment. Surging Ahead: Lower Manhattan’s Economic Revival and What It Means For New York, a report on the major advances in Lower Manhattan’s economy expected over the next five years as a result of post-September 11th investments and the area’s status as a burgeoning center for some of New York City’s highest value, most dynamic industries; The Brain Gain, 2015 Report, an updated report on how the region’s shifting demographics continue to favor the Lower Manhattan Business District. Previously released in 2012, the updated data shows an even stronger trend; TAMI Takes Lower Manhattan, a report on the growth of technology, advertising, media, and information companies moving south of Chambers Street; Everything Old is New Again: Conversions of Historic Properties in Lower Manhattan, a report on historic properties preserved through significant investment and changes in use; The Golden Age of Transit in Lower Manhattan, a report released on Fulton Center’s opening, describing how the more than $6.4 billion of transit investments made since 2005 benefit a large and growing labor force;

Alliance for Downtown New York 120 Broadway Suite 3340 New York, NY 10271 212.566.6700 DowntownNY.com Telephone: 212-835-2787 Email: Research@DowntownNY.com

Profile for Alliance for Downtown New York

Lower Manhattan Real Estate Market Overview Q3 2018  

The Alliance for Downtown New York is pleased to release the Q3 2018 Lower Manhattan Real Estate Market Report providing a review of commerc...

Lower Manhattan Real Estate Market Overview Q3 2018  

The Alliance for Downtown New York is pleased to release the Q3 2018 Lower Manhattan Real Estate Market Report providing a review of commerc...