COMMERCIAL OFFICE MARKET

EMPLOYMENT & OFFICE
RETAIL
TOURISM & HOSPITALITY
RESIDENTIAL
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ALLIANCE FOR DOWNTOWN NEW YORK
Q1 2014
LOWER MANHATTAN REAL ESTATE MARKET OVERVIEW
COMMERCIAL OFFICE MARKET
Vigorous Leasing by New Tenants Drives
Strong Quarter
The Lower Manhattan market started the year with a bolt out of
the gates. Robust commercial leasing, totaling 1.6 million square
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1st quarter leasing up and continued appetite among
existing tenants and those new
to the market who are taking big
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quarter, the downtown market saw
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year-­over-­year
feet, including Macmillan Science
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18%
TOP 10 LEASES IN LOWER MANHATTAN;; Q1 2014
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TENANT NAME
Location
SF LEASED
Transaction Type
SECTOR
1
Macmillan Science
and Education
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176,121
Relocation
Creative Services,
Media
Teach for America
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172,744
Relocation
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Amerigroup Corporation
14 Wall Street
165,029
Renewal
FIRE
4
Allied World Insurance
Company
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142,000
Renewal
& Expansion
FIRE
City of New York
0DLGHQ/DQH
94,896
Renewal
Government
6
Revlon
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90,194
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Other
Trinity Wall Street
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68,350
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of the State Comptroller
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66,573
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Government
Richard Kibbe & Orbe, LLP
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59,323
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Professional
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DEA Strike Force
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56,859
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Q1 2014 Leasing Activity by Sector
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tenants.
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the charge for newcomers in Lower Manhattan this quarter
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“Downtown is no longer the
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1 Relocation analysis - 2011 - Q1 2014 data provided by CBRE
2 Konrad Putzier, “Downtown Leasing Shows Midtown Swagger,” Real Estate Weekly,
March 11, 2014.
Q1 2014 AND YEAR-END LEASING ACTIVITY
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8 Million
7 Million
6 Million
5 Million
4 Million
3 Million
2 Million
1.6 MM
1 Million
2004
2005
2006
2007
2008
Q1
Lower Manhattan Real Estate Market Overview | Q1 2014
2009
2010
2011
2012
2013
2014
Year-End
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EMPLOYMENT & OFFICE
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TOURISM & HOSPITALITY
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RESIDENTIAL
RELOCATIONS TO LOWER MANHATTAN VS. OUT OF
LOWER MANHATTAN, 2011-Q1 2014
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309,000
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growth in Lower Manhattan
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employees in Lower Manattan
dynamic new center
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companies. Among them is Macmillan Science and Education,
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CAPITAL IMPROVEMENTS
1.9
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MIDTOWN
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LOWER MANHATTAN
GROWS IN LOWER MANHATTAN
There is no rest for WeWork. Headquartered at 222
Broadway, the growing national and international provider
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25 BROADWAY 129,000 SF
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Lower Manhattan Real Estate Market Overview | Q1 2014
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and continues to expand throughout the district, as more startXSVDQGHVWDEOLVKHGWHFKÀUPVPDNH/RZHU0DQKDWWDQWKHLU
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TOP 15 RELOCATIONS IN Q1 2014
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Tenant Name
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Sector
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Universal Protection Service
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Teach for America
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Girl Scout Council of Greater
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Revlon
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17,244
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Education
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DEA Strike Force
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Government
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Lucas & Mercanti , LP
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14,880
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14,120
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Technology
46,175
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EWS
48 Wall Street
Hadassah, The Women’s
Zionist Org of America, Inc
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WTS Proprietary Trading Group, LLC
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13,030
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Robert Silman Associates
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37,032
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Professional
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14
Library Journal
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11,660
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Seedco
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18,300
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Mekanism
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10,100
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Lower Manhattan Real Estate Market Overview | Q1 2014
4
EMPLOYMENT & OFFICE
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LOWER MANHATTAN AVERAGE ASKING RENTS
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$55
$54
$50
$49
$45
$45
$40
$40
$35
$35
Robust Leasing Keeps Vacancy Rate in Check
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quarter. 7KHDYDLODELOLW\UDWHZDVSHUFHQWODVWTXDUWHUGRZQ
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$38
$30
Q1
Q2
Q3
Q4
Q1
2013
Class A
2014
Overall
Class B
OVERALL AVERAGE ASKING RENTS
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$75
$70
Strong Market Bumps Rents Up
Strong demand from tenants seeking quality space for a lower
price than Midtown and Midtown South is pushing rents slightly
higher, according to landlords. Lower Manhattan landlords
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nudged the rents upward. Pricing in Lower Manhattan continues
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$70
$66
$65
$60
$60
$55
$52
$50
$49
$45
$40
$40
$35
Q1
Q2
Q3
Q4
Q1
2013
Midtown
2014
Midtown South Lower Manhattan
OVERALL VACANCY RATES BY SUBMARKET
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13%
12%
11.2%
11.1%
11%
10% 8.0%
9%
8% 10.1%
7.9%
7% 6.9%
6%
5%
4%
Q1
2013
Q2
Lower Manhattan
Lower Manhattan Real Estate Market Overview | Q1 2014
Q3
Midtown South
Q4
Q1
2014
Midtown
5
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Buildings
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Emmes Realty is contracted to purchase 160 Water Street
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55 Broadway
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potential sale price has not been announced, but it is
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Lower Manhattan Real Estate Market Overview | Q1 2014
61 Broadway
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square feet of new or repositioned retail is coming online within
the next two years, amid brisk demand from retailers. Strong
interest from tenants and an increasing optimism about the
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Rents Rise as Offerings Expand
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the largest quarterly increase in Manhattan retail market, rising
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last year.
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Food
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Wogies, a sports bar specializing in Philly cheesesteaks,
opened at 44 Trinity Place.
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Maiden Lane.
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111 Fulton Street.
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Courtesy of Stonehill & Taylor Architects
The Gap
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at the base of the under-construction
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Lower Manhattan Real Estate Market Overview | Q1 2014
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company is shrinking its portfolio around the country.
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Courtesy of Trisha Reger
Emily Thompson Flowers
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South Street Seaport
Major Projects Creating a New Retail
Destination
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Lower Manhattan Real Estate Market Overview | Q1 2014
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8
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a late June opening, the retail and dining spaces will become
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RETAIL RENT UP 41%
year-­over-­year on the
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this quarter.
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Lower Manhattan Real Estate Market Overview | Q1 2014
9
EMPLOYMENT & OFFICE
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Lower Manhattan Hotels Taking a Bigger Bite
of the Big Apple’s Hospitality Business
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to buy 80 South StreetDVTXDUHIRRWSDUFHODW6RXWK
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percent increase in its number of hotel rooms.
Hotel Market Follows Citywide Trends
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4%
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currently has 4% of
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20%
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Lower Manhattan Real Estate Market Overview | Q1 2014
Hampton Inn
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Hotel & Address
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161 Front Street
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Lower Manhattan Real Estate Market Overview | Q1 2014
11
EMPLOYMENT & OFFICE
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RESIDENTIAL MARKET
New Developments Diversifying Inventory,
Nurturing Population Growth
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mixed-use and residential buildings.8 The pipeline of upcoming
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RESIDENTIAL PIPELINE
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Lower Manhattan Real Estate Market Overview | Q1 2014
Address & Building
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233 Broadway
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12 Warren Street
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Lower Manhattan Sales Market Hits All-Time
Price Per Square Foot High
The sales market was robust this quarter, with pricing hitting a
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were buoyant throughout the winter, with total Lower Manhattan
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MEDIAN RENTAL PRICES
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$3,800
$3,700
$3,600
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like the rest of Manhattan.%XW/RZHU0DQKDWWDQHQGHGWKH
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$3,300
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Manhattan
AVERAGE SALES PRICE ($) PER SF
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$1,400
$1,376
$1,350
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$1,103
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$900
Q1
Q2
Q3
Q4
Q1
2014
2013
Manhattan
Lower Manhattan Real Estate Market Overview | Q1 2014
Q3
2013
$1,000
9 Source of rental rents: Miller Samuel/Douglas Elliman,
Source of rental vacancy rate: Citi Habitats
10 Source of sales market data: Miller Samuel/Douglas Elliman
11 Source of property sales data: Massey Knakal
$3,450
$3,400
Lower Manhattan
13
EMPLOYMENT & OFFICE
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One World Trade Center
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National September 11
Memorial & Museum
Courtesy of Silverstein Properties
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million potential workers live within 45 minutes of the site, which is
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12 Martin Z. Braun and David M. Levitt, “Port Authority at Crossroads as World Trade Funds Debated,”
Bloomberg Business News, March 11, 2014.
Lower Manhattan Real Estate Market Overview | Q1 2014
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a six-day dedication period beginning on
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fencing around the plaza this year.
14
EMPLOYMENT & OFFICE
RETAIL
TOURISM & HOSPITALITY
RESIDENTIAL
CAPITAL IMPROVEMENTS
Fulton Center
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and eateries opening this fall;;
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permanent sidewalks and bollards along both Fulton Street and
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Pier 17 Redevelopment
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old Pier 17;;
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and entertainment space, as well as a food market in the
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Fulton Street Reconstruction
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completion;;
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signage and lighting were installed;;
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Broadway Reconstruction
Courtesy of Scott Lynch
Fulton Center
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and commercial space coming online
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All underground infrastructure -- including water mains, sewers,
electric, gas and other utilities -- will be replaced, as well as
constructing new streets and curbs;;
Work proceeds on the east side, between Liberty and Rector
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Courtesy of Howard Hughes Corporation
Pier 17
Demolition of the existing structure has
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retail, dining and entertainment space
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9LVLW :::'2:172:11<&205(6($5&+ for additional publications on the Lower Manhattan real estate market and economy.
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Lower Manhattan Real Estate Market Overview | Q1 2014
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