Lower Manhattan Real Estate Market Overview, Q3 2021

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Q3 2021

LOWER MANHATTAN REAL ESTATE MARKET REPORT

Lower Manhattan Real Estate Market Report | Q3 2021

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Q3 2021

LOWER MANHATTAN REAL ESTATE MARKET REPORT Lower Manhattan recorded its strongest quarterly leasing total since the beginning of the Covid-19 pandemic in the third quarter. Rents are relatively stable, despite office vacancies remaining high. Demand for residential units near office buildings soared — evident by an active sales market and median rents setting new records. Hotels have shown growth in both occupancy and rates, and the loosening of travel restrictions is welcome news for the hospitality sector.

Over 70 retailers opened so far in 2021, ranging from fullservice restaurants to a new 14-screen movie theater.

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

Highest Leasing Activity Since Pandemic Began The third quarter saw Lower Manhattan record 775,000 sq. ft. of office leasing, according to CBRE — the highest quarterly total since the pandemic began. Third quarter leasing was up 31% from last quarter and 70% yearover-year, but still 32% lower than the five-year quarterly leasing average. Midtown Manhattan saw 3.31 million sq. ft. of leasing activity in the second quarter, up 59% from the previous quarter, while still 13% behind the five-year quarterly average. Midtown South strongly rebounded as well, as leasing activity more than doubled to 1.88 million sq. ft.. The strength was primarily due to heavy leasing among mid-size tech and financial tenants, which boosted leasing in Midtown South to 47% above the five-year quarterly average.

Improvements on leasing activity is expected to continue in the coming months. According to Newmark, nearly 260 tenants are looking for a total of 12.2 million sq. ft. of office space across New York City, surpassing levels seen in the first nine months of 2019 and 2020. FIRE and TAMI tenants comprised 69% of those new tenants in the market.

Along the Water Street corridor, three large deals over 100,000 sq. ft. were signed. Law firm Fried, Frank, Harris, Shriver & Jacobson renewed their 399,724 sq. ft. lease at One New York Plaza for another 10 years. DailyPay, Lower Manhattan Real Estate Market Report | Q3 2021

775,000

Square Feet Of New Leasing In The First Quarter — The Highest Quarterly Total Since The Pandemic Began

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a financial company performing payroll services, 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.

Demand for sublet spaces at One World Trade Center drove over 170,000 sq. ft. of leasing. Reddit, the popular news and discussion forum, took 47,463 sq. ft. of office space, relocating from Midtown South. Constellation Agency, an advertising company, and IBISWorld, a data publishing firm, moved within Lower Manhattan taking 48,000 sq. ft. and 38,000 sq. ft., respectively. Network Capital Funding, a financial services company, took 37,000 sq. ft.. Constellation Agency and Reddit both took sublet space from Condé Nast, while IBISWorld and Network Capital Funding took sublet space from Moody’s.

Nearby, Mansueto Ventures, parent company of Inc. and Fast Company, renewed their 40,900 sq. ft. lease at 7 World Trade Center. Index Exchange, an advertising technology company, signed a 27,375-sq.-ft. lease at 3 World Trade Center, relocating from Midtown South. Galaxy Digital, another fintech company, took 45,927 sq. ft. sublease space at 300 Vesey Street, relocating from Midtown South.

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. At the beginning of the fourth quarter, Orchard Technologies announced its expansion and relocation downtown, signing a 107,000 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.. Orchard Technologies joins other emerging TAMI firms like DailyPay and Constellation Agency that have expanded their presence in Lower Manhattan this year.

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Lower Manhattan Top Leases, Q3 2021 Source: Downtown Alliance, CBRE, JLL, Colliers, Newmark Knight Frank, CoStar

Tenant Name

1

Location

SF Leased Transaction

Sector

Fried, Frank, Harris, Shriver & Jacobson

399,724 Renewal

Professional Services, Law

1 New York Plaza

2

DailyPay

55 Water Street

Stripe

137,274 Move Within LM/ FIRE Expansion 114,907 Relocation

TAMI, Technology

48,000 Move Within LM

TAMI, Marketing

47,463 Relocation

TAMI, Technology

300 Vesey Street

45,927 Relocation

FIRE

National Sept.

11 Memorial & Museum

42,128 Renewal

Nonprofit

Mansueto Ventures

40,900 Renewal

TAMI, Media

38,000 Move Within LM

Professional Services, Other

37,000 Renewal

FIRE

27,375 Relocation

TAMI, Advertising

Recycle Track 12 Systems

21,312 Relocation

Other

NYC Dept. of Mental Health & 13 Mental Hygiene

18,700 Renewal

Government

3

4

5

6

7

199 Water Street (within WeWork)

Constellation Agency

One World Trade Center

Reddit

One World Trade Center

Galaxy Digital

200 Liberty Street

8

9

7 World Trade Center

IBISWorld

One World Trade Center

Network Capital 10 Funding One World Trade

11

Index Exchange

3 World Trade Center

115 Broadway

22 Cortlandt Street

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Office Workers Slowly Return The summer of 2021 began optimistically with citywide vaccination rates climbing and capacity restrictions being lifted, which together showed encouraging signs of economic growth. In response to vaccination rates lagging nationwide, and the spread of the contagious delta variant, President Biden mandated the vaccine for government agencies and private-sector businesses with over 100 employees. Similarly, Governor Cuomo and Mayor de Blasio mandated vaccinations for all healthcare workers in the state and all employees in the city’s education system, respectively. By mid October, these efforts pushed vaccination rates in New York City to nearly 85% of all adult residents (72% of all residents).

However, as the summer closed, the delta variant was spreading across the country rapidly, many consumers and businesses appeared to shift expectations on when they would return to office life. 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, has directed roughly 80,000 city workers across the five boroughs to return to the office in mid-September. New York City office occupancy was 30% by early October 2021 (up from 24% in early summer), based on key fob swipes from Kastle Systems.

Return-to-work data in New York City is still below the U.S. major office market average (36%). An August survey by The Partnership for New York City estimates over 75% of employees across the city will be returning by January 2022.

Despite Stronger Leasing, Vacancy Rates Continue To Rise With Addition Of Large Blocks Of Direct Space Although leasing rose to the highest levels since the pandemic began, vacancy continues to increase due to direct and sublet space being added to the market.

According to Cushman & Wakefield, Lower Manhattan’s overall vacancy rate rose from 17% to 17.8% over the past quarter, mirroring trends in the other Manhattan submarkets. Class A vacancy rose and now stands at 18.9% — the highest rate in the last 10 years.

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For comparison, overall and class A vacancy stood at 12.1% and 13%, respectively, one year ago. Over the past quarter, nearly 1.4 million sq. ft. of direct Class A space entered the market. In addition to significant new sublet availability, many of the large blocks were long anticipated additions from vacating tenants or planned redevelopments.

• The entirety of 175 Water Street became available,

adding 676,000 sq. ft. of direct space to the market.

Early in 2020, AIG announced plans to move its headquarters to Midtown. The firm is maintaining a 217,000 sq. ft. footprint at 28 Liberty Street and another sizable office in Jersey City.

• Approximately 220,000 sq. ft. is available at 85 Broad Street. WeWork made 184,000 sq. ft. of direct space available (still occupying another 166,000 sq. ft.), as well as Nielsen Media putting up 36,000 sq. ft. for sublet.

• 107 Greenwich Street, which was completed last year, has over 140,000 sq. ft. available.

• Two medium-sized sublet blocks totaling 129,000 sq. ft. at 1 New York Plaza, including space from MacMillan.

• Two medium-sized sublet blocks totaling 93,000 sq.

ft. at 28 Liberty Street, including space from Wolters Kluwer.

• 81,000 sq. ft. of direct space at 110 William Street and 71,000 sq. ft. at One Whitehall Street.

Approximately 26% of the entire downtown market’s office availability is available via sublease. On a positive note, the amount of sublet space downtown continues to decrease (down from a high of 32% in the first quarter of 2020), either by leasing or withdrawing the space from the market. In addition to DailyPay’s large sublease at 55 Water Street from S&P Global, the following companies have withdrawn their sublease space from the market:

• Moda Operandi removed 83,685 sq. ft. at 195 Broadway;

• DAZN Group removed 50,668 sq. ft. at One World Trade Center;

• New Avon removed 45,558 sq. ft. at One Liberty Plaza; and

• Giant Spoon removed 33,618 sq. ft. at 44 Wall Street.

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Additional and substantial vacancies will soon be reflected in statistics in the near future. Before the pandemic, large blocks of space in buildings were expected to become available due to substantial capital projects. In addition to 175 Water Street, the other properties include:

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Overall Vacancy Rates by Submarket Source: Cushman & Wakefield

• 60 Wall Street is undergoing a full $250 million

renovation, where Deutsche Bank once occupied 1.6 million sq. ft. before officially relocating this past summer to Columbus Circle. Construction is expected to start in 2022 and wrap in 2023.

• 111 Wall Street is also undergoing a $500 million

renovation. 1.1. million sq. ft. of office space is available after Citigroup consolidated at their Tribeca headquarters last year. Construction is underway and expects to wrap in 2024.

Midtown’s overall vacancy rate increased to 19.4%, up yearover-year from 14.3% and the highest rate on record. Class A office vacancy in Midtown rose to 18.3% as availability hit a record high of 34.5 million sq. ft.; class B office vacancy also increased to a substantial 23%, up 6 percentage points from Q3 2020.

Class A Vacancy Rates by Submarket Source: Cushman & Wakefield

Midtown South’s overall vacancy rose by 7.9% to 19% over the last year, the largest annual increase across Manhattan’s CBDs. While Class A office vacancies in Midtown South decreased slightly from the previous quarter to 13.4%, class B office vacancy hit 24.5% — a year-over-year increase of 11.6%.

17.8%

Overall Office Vacancy in Lower Manhattan, up from 12% Year-Over-Year

18.9%

Class A Office Vacancy in Lower Manhattan, up from 13% Year-Over-Year

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Asking Rents Remain Flat, Concessions At All-Time High

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Overall Asking Rents by Submarket Source: Cushman & Wakefield

According to Cushman & Wakefield, Lower Manhattan’s overall average asking rent remained flat at $60.15 per sq. ft. (but was down 3.1% year-over-year), despite lots of space being added to the market. Class A asking rents ticked up by 1% to $65.40 per sq. ft. due to more expensive space being added at 175 Water Street and 107 Greenwich Street. Cheaper sublet space and a flight to quality caused Class B average asking rents to fall the most over the past year — 7.3% — to $52.56.

Landlords appear more willing to negotiate with free rent and concessions — which are at an all-time high — rather than adjusting asking rents. Asking rents hit high water marks in late 2018, when average overall rents were nearly $64 and average class A rents were almost $68.

Overall and Class A office rents in Midtown decreased slightly over the quarter to $73.67 and $79.41, respectively. The decreases are more apparent over the past year as overall and Class A asking rents have dropped nearly 6% and 7%, respectively.

Class A Asking Rents by Submarket Source: Cushman & Wakefield

Class A rents in Midtown South continued trending down in the third quarter, coming in 2.8% below the last quarter and 6.8% below the same period last year. While overall asking rents remained almost flat over the last quarter, they fell 5.8% year-over-year to $68.79. 2019 saw rents hit record highs; now overall and class A rents have decreased by around $13 and $15 per sq. ft., respectively. This is the sixth consecutive quarter where overall rents in Midtown South are cheaper than Midtown, returning to the historical differences before tech leasing drove boutique office construction.

Third Quarter 2021 Property Sales Mixed Use Building Sales In early October, 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 sold for $10.1 million to Davean Holdings. The two adjoining buildings, which span 14,690 sq. ft., house the bars Underdog and Revolution, as well as seven rental apartments. Davean also owns 6 Stone Street and 126 Pearl Street. Developer Goldman Properties initially listed the portfolio for $20 million in November 2020.

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Office Building Sales In late September, GFP Real Estate and Northwind Group entered into contract to sell 100 Pearl Street to German investor Commerz Real for $850 million, or $900 per sq. ft.. GFP will remain under a management agreement.

The 968,000-sq.-ft. office building, formerly known as 7 Hanover Square, has been undergoing a $250 million modernization and renovation, including updated building infrastructure, a new lobby, an Urbanspace food hall and a penthouse amenity space. GFP and Northwind bought the building in 2018 for $308.5 million when Guardian vacated the building and have since brought the building to 96% leased, including long-term deals with NYC Health + Hospitals and the Securities and Exchange Commission.

Vanbarton Group is reportedly looking to sell 160 Water Street for approximately $200 million, pitching the office building as a candidate for residential conversion.

Vanbarton purchased the property in 2014 for $165 million. Office tenants NYC Health + Hospitals and NYC Human Resources Administration have relocated to 100 Pearl Street and 4 World Trade Center, respectively.

If converted, the 500,000 sq. ft. office building could yield roughly 600 market-rate apartments. The identical, neighboring building at 180 Water Street was converted in 2017 by MetroLoft Management.

Land Sales In early October, 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. Grubb plans to build a 50-story building, which will be known as 8 Carlisle, containing 22,000 sq. ft. of groundfloor retail and 400 residential units. 8 Carlisle, which is set to receive tax abatements under the city’s 421a program, will include a mix of affordable and market-rate rental units. The development is poised to begin construction by Summer 2022.

Hotel Sales McSam Hotel Group sold the 192-room 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.

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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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RETAIL Throughout the past year, 74 retailers have opened, including 23 in the third quarter — two-thirds of which are food and beverage outlets.

• T he team behind Michelin-starred Crown Shy debuted 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 full-service Greek restaurants opened: Skinos

Mediterranean at 123 Washington Street in the former BLT Bar & Grill and Anassa Taverna at 102 North End Avenue in the former North End Grill.

• Joining the roster of dining offerings on Pier 17 is Pearl

A number of long-announced retailers plan to open before the year ends.

• Alamo Drafthouse at 28 Liberty Street debuted in

mid-October. The 14-screen cinema’s opening was delayed by the pandemic. The venue also features The Press Room, a bar and museum featuring vintage letterpress film advertising plates; and

• MezCali, a two-story bar and Mexican restaurant coming soon to 83 Maiden Lane.

• QC 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.

Alley, an extensive indoor/outdoor cocktail bar.

• Three Indian restaurants opened: Tagmo, a full-service restaurant and bakery at 226 Front Street; Inday, a fast-casual eatery at 1 New York Plaza, and Danbangg at 80 Nassau Street. All these locations replaced retailers that closed during the pandemic.

• Other casual eateries to open include: Cicci Di Carne,

an Italian sandwich shop at Brookfield Place; 3 Times, a soup dumpling spot at 66 Pearl Street, and Five Guys Burgers at 80 Maiden Lane.

The pace of pandemic-related closures has slowed considerably with 17 businesses closing in the third quarter. Over 70 retailers have closed since the beginning of the year. Recent closures include:

• Racines, a popular Tribeca wine bar. Transition to a

new restaurant concept is underway by ownership; and

• Latin Social, a restaurant and bar, at 75 Maiden Lane.

SAGA & Overstory at 70 Pine Street Courtesy of Adrian Gaut/SAGA Lower Manhattan Real Estate Market Report | Q3 2021

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HOTELS + TOURISM Lower Manhattan’s Hotel Development The current hotel inventory in Lower Manhattan stands at 7,567 rooms across 36 hotels. Currently, 30 hotels in Lower Manhattan are open to receive guests, with another two hotels planning to reopen this fall.

Recently, two new hotels opened and two reopened in Lower Manhattan:

• Casa Cipriani debuted at the Battery Maritime

Building with 47 rooms. The property also includes a private members club, a 15,000-sq.-ft. spa and wellness center, and an 800-person Cipriani event space which opened in late 2019; and

• Courtyard New York Downtown Manhattan/

Financial District opened at 215 Pearl Street (lower floors), with 200 rooms;

• Smyth Tribeca reopened at 85 West Broadway,

following the closure of the AKA Tribeca. Originally called the Smyth, the hotel was rebranded as the AKA Tribeca in 2018 after a renovation. A new restaurant and bar will be announced later in 2021, replacing Little Park;

• The 298-room Moxy NYC Downtown reopened in October at 26 Ann Street after a change in ownership.

The Andaz Wall Street at 75 Wall Street plans to reopen in December.

There are an additional 1,838 hotel rooms across 10 hotels under construction or in development in Lower Manhattan. Over 390 rooms across three hotel developments are anticipated to open before the end of 2021. They include:

Lower Manhattan Hotel Pipeline Source: Downtown Alliance

Hotel / Address 1

2

3

4

5

6

7

8

9

10

• Residence Inn New York Downtown Manhattan/

Financial District at 215 Pearl Street (upper floors), with 120 rooms;

11

Residence Inn 215 Pearl Street

Owner/ Developer Lam Group

Rooms Open Date 120 (upper floors)

2021

WhyHotel

Rudin Management

232

2021

Hotel Indigo

Fortuna Realty

128

2021

The Fidi Hotel 11 Stone Street

Premier Emerald LLC

143

2021

The Wall Street Hotel

Actium Development

180

2022

Union Investment Real Estate

326

2022

Fit Investment Group

173

2022

AC Hotel

Hidrock Realty

230

TBD

TBD Hotel

Solil Mgmt/ Firmdale

70

TBD

Tempo by Hilton

Hidrock Realty

296

TBD

TBD Hotel

The Moinian Group

172

TBD

110 Wall Street

120 Water Street

88 Wall Street

Motel One

133 Greenwich Street

Aloft Hotel

50 Trinity Place

112 Liberty Street

86 Warren Street

140-142 Fulton Street

7 Platt Street

• WhyHotel Front + Wall Street at 110 Wall Street,

Total Hotels in the Pipeline

11

• Hotel Indigo NYC Downtown - Wall Street at 120

Total Hotel Rooms in the Pipeline

2,070

replacing the WeLive operator, with 232 rooms; Water Street, 128 rooms; and

• The Fidi Hotel at 11 Stone Street, 143 rooms.

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Occupancy and Average Daily Room Rate Continue Recovery While citywide hotel performance metrics remain below prepandemic levels, positive momentum continued through the end of the third quarter. Over the summer, NYC & Company launched a $30 million tourism recovery campaign. Bookings are steadily increasing as tourism and business travel start to rebound. In recent months, Broadway reopened and the US Open and New York Fashion Week returned, bringing added travel to the city. Beginning November 8, travel restrictions will be lifted for vaccinated international visitors coming into the United States. International visitation is a huge piece of visitorship to Lower Manhattan — over 60% of all visitors in 2019 were international.

During the last two quarters, Lower Manhattan’s average occupancy has rebounded more quickly than the city’s overall, according to data published by STR. Lower Manhattan ended the third quarter with an occupancy rate of 60% — up 6% from the previous quarter, but 28% below the third quarter of 2019 (citywide occupancy rate was approximately 49%). Lower Manhattan’s average daily room rates rose 18% from the previous quarter to $191; however, rates are still 25% below the same period in 2019. Citywide room rates rose similarly from the second quarter, but are 21% below the third quarter of 2019.

Vaccinations Now Required 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. The mayor recently announced that, since the mandate went into effect on September 13, the city’s overall vaccination rate increased 9%, while the vaccination rate among 18- to 34-year-olds increased 13%.

Lower Manhattan Real Estate Market Report | Q3 2021

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Hotel Occupancy in Lower Manhattan and New York City Source: CoStar/STR

Hotel Average Daily Room Rate (ADR) in Lower Manhattan and New York City Source: CoStar/STR

$280

$253

$115

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RESIDENTIAL Inventory and Development Lower Manhattan has 33,650 units in 342 residential buildings. Over 3,970 units in 14 buildings are under construction or planned for development, with about 61% currently planned as rental units and 39% as condos.

Construction is expected to wrap up later this year on 209 rental units at 7 Dey Street, also known as 185 Broadway.

Among the 209 rental units, 63 units will be affordable.

Developed by SL Green, the 31-story, mixed-use tower will have 48,000 sq. ft. of retail and commercial office space.

In early October, 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. Grubb plans to build a 50-story building, which will be known as 8 Carlisle, containing 22,000 sq. ft. of groundfloor retail and 400 residential units. 8 Carlisle, which is set to receive tax abatements under the city’s 421a program, will include a mix of affordable and market-rate rental units. The development is poised to begin construction by Summer 2022.

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Lower Manhattan Residential Pipeline Source: Downtown Alliance

Address Condo + Rental Units Under Construction

Lease / Building Type

Units

Total

1,236

Rental New Construction

1

7 Dey Street

2

One Wall Street New Construction

3

1 Park Row

4

2021

566

2022

Condo New Construction

58

2023

161 Maiden Lane

Condo New Construction

80

TBD

5

45 Park Place

Condo New Construction

50

TBD

6

125 Greenwich Street

Condo New Construction

273

TBD

Condo

Condo + Rental Units In Development

Total

45 Broad Street Condo

Residential Rents Jump As Discounts Fade

2

265 Broadway

According to statistics from Miller Samuel/Douglas Elliman, the median rent in Lower Manhattan surpassed a record high set in 2019, reversing the decline seen throughout the pandemic. Median rents rose to $4,100 in the third quarter, up nearly 15% from the same period last year, and 10.2% higher than in the second quarter. Median rents are now $1,100 higher than those at the beginning of 2021.

On the contrary, Manhattan’s overall median rent was flat compared to the last quarter ($3,265), but still over 7% below 2019 levels.

3

Lower Manhattan Real Estate Market Report | Q3 2021

Open Date

209

1

Listing discounts were largely absent during the third 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

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2,741 206

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

250 Water Street

Condo/Rental New Construction

270

TBD

7

8 Carlisle Street Rental

400

TBD

8

130 Liberty Street

1,325

2028

New Construction

New Construction Rental New Construction

TOTAL UNITS IN THE PIPELINE

3,977

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leases caused demand for new rentals to soar over the third quarter. The number of new rentals doubled from the second quarter, nearly 32% higher than the same period last year.

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Median Residential Rental Price Source: Miller Samuel/Douglas Elliman

Residential Sales Volume Surges The sales market was extremely active in the third quarter.

The median sales price for co-ops and condos rose to $1.59 million, up nearly 39% from the previous quarter, although 22% down year over year. Manhattan’s overall median sales price rose slightly to $1.12 million — up 1.4% year over year, although nearly 30% below prices in Lower Manhattan. Encouraged by the pace of the city’s reopening, buyers sought to take advantage of temporary discounts, increased savings and near-record low interest rates. Lower Manhattan’s average price per sq. ft. rose to $1,894, up almost 7% from the past year. With 393 condo/co-op home sales so far in 2021 — 156 in the third quarter alone — the sales volume was 44% higher than all of 2019 and is on track to triple the sales seen in 2020.

130 Liberty Street

$4,100

Median Residential Sales Price Source: Miller Samuel/Douglas Elliman

Median Rent in Lower Manhattan — A Record High And Up From $3,000 During the Pandemic Trough. Listing Discounts and Concessions Were Largely Absent.

393

Condo/Co-Op Sales in Lower Manhattan Throughout 2021 — Already 44% Higher Than Volumes Seen In All Of 2019.

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MAJOR PROJECTS UPDATE World Trade Center Ronald O. Perelman Performing Arts Center Construction on the Ronald O. Perelman Performing Arts Center continues with nearly 4,900 marble panels now being installed on the exterior of the structure. 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 currently being installed on the exterior. The church, located atop Liberty Park, broke ground in 2014, but stalled in late 2017 after funding issues. The $80-million project anticipates completion in 2022.

The Perelman Center Photo by Michael Young/New York Yimby

Infrastructure Brooklyn Bridge Bike Lane Opens 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 lanes. The former shared bike and pedestrian wooden walkway was converted to a pedestrian-only path.

NYC Ferry Expands Service In mid-August 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 continues via the Whitehall terminal.

In late 2021/early 2022, the NYC Ferry will add a new Coney Island route with stops at Pier 11-Wall Street, Bay Ridge and Coney Island. The new Coney Island route will partially overlap with the East River route when the Lower Manhattan Real Estate Market Report | Q3 2021

Brooklyn Bridge Bike Lane 13 Courtesy of NYC Department of Transportation

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expansion is complete. In addition, the Soundview route will expand to Throgs Neck/Ferry Point Park in the Bronx this year, further connecting the Bronx to Midtown and Pier 11-Wall Street.

The Battery Playscape, a 1.4-acre playground, anticipates opening in late 2021. The new playground, located across from the SeaGlass Carousel, replaces and triples the size of the former playground.

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.

Governors Island In late September, Mayor de Blasio and the Trust for Governors Island announced that the 172-acre island will be open to the public year-round, beginning November 1.

Later this year, QC NY, a luxury day spa, will open soon in three historic buildings at the northern tip of Governors Island.

In addition, the NYC Ferry will now permanently serve Governors Island via the South Brooklyn Route, expanding direct access from Red Hook, Atlantic Ave/Brooklyn Bridge Park-Pier 6, DUMBO/Fulton Ferry, Pier 11/Wall Street and Corlears Hook on the Lower East Side. Daily ferry service will also still continue via the Battery Maritime Building.

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

Parks and Open Space The Battery In May, 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. Construction of the Wagner Park portion of the project and its pavilion is scheduled to start in November, while work on Pier A Plaza and The Battery is expected to begin in January. All projects are due to be completed in the spring of 2024.

Lower Manhattan Real Estate Market Report | Q3 2021

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