NEW YORK CITY-Perhaps assuming New Yorkers can't help but express cynicism at some point—particularly in response to good news—the Alliance for Downtown New York has issued a new report echoing what industry analysts said throughout 2013: Lower Manhattan had a banner year and is headed for a bright future.
Commercial leasing escalated throughout the year—ending with a robust fourth quarter—the best performing since 2006 and more than double the five-year average. More specifically, year-end leasing activity topped out at a 39% increase over 2012 and was 29% higher than the 10-year average. Downtown leasing also surpassed some other markets, the report notes, coming in at 48% greater than Midtown South.
"The momentum behind the growth of Lower Manhattan is unprecedented," says Nicole Kolinsky, director of public relations at the Alliance. "Leasing is at a five-year high and the opening of several world-class capital projects is just around the corner. If 2013 has been any indication, the resurgence of America's fourth largest business hub is full speed ahead."
Notable relocations in the technology, advertising, media and information sectors, in particular, gave Lower Manhattan a boost in 2013, with tech leasing especially strong at 122% over 2012.
The fourth quarter finished with a bang, posting four office deals of over 200,000 square feet while, on the investment sales side, three of the city's largest property sales during the year took place Downtown.
Going forward, anticipated growth in tourism and an increase in office space as a result of the World Trade Center opening will bring in more leisure and business travelers, driving up hotel supply. Some 2,370 new rooms in 13 hotels are under construction while another four properties are in the planning stages, allowing the area to nearly double its hotel inventory by 2016.
Meanwhile, the next wave of "marquee residential development is underway," the Alliance says, including six big projects that broke ground in 2013 and will add more than 1,200 units to the market.
Additionally, retail in the area is on the rise. The positive growth on these numerous fronts has led to the creation of some 1.5 million square feet of new or substantially improved retail space south of Chambers street. All of the development, including a strong pipeline of high-end residential construction, has spurred great interest in new retail opportunities, the Alliance says, while projects such as Brookfield Place will soon open and inject new and interesting retail concepts into the city.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
