Alliance Report Documents Residential Rebound and Office Overage
In a development that will shock almost nobody, the cost of housing in Lower Manhattan is moving steadily upward, according to the Lower Manhattan Real Estate Market Report, a quarterly analysis from the Downtown Alliance.
This analysis shows that for the period ended September 30, the median rent in Lower Manhattan reached $4,768, which is 6.0 percent higher than the second quarter of this year, and 19.2 percent higher than prior to the onset of the Covid pandemic. (The local benchmark is also 7.7 percent higher than the current median rent for Manhattan as a whole, which is $4,399.)
A separate report by the online real estate database company StreetEasy indicates that the inventory of vacant rental apartments has grown faster in Battery Park City than in any other Manhattan neighborhood, and is second citywide only to the Mott Haven community in the Bronx. The number of empty apartments in the 92 acres of landfill between West Street and the Hudson River now stands at 240, a jump of 78 percent from the same period one year ago. While StreetEasy predicts that this glut may create opportunities for prospective tenants to bargain with landlords, at least for now, local rents are still rising: The same report says that the median asking rent in Battery Park City is currently $6,280, which is 12.1 percent higher than a year earlier.
For owner-occupied homes, the Alliance report notes, “the sales market cooled down slightly in the third quarter in Lower Manhattan.” Median sales price for co-ops and condos Downtown declined to $1.08 million, slipping 15.3 percent from the second quarter. This benchmark is almost 48 percent lower than the record high seen at the end of 2022. Another lagging indicator is the number of units sold during the third quarter: Sales volume dipped to 71 units, a 41 percent decline from the second quarter.
The residential landscape in the square mile below Chambers Street appears poised to exploit the demand implied by rising prices. Lower Manhattan currently has 34,243 units in 345 residential buildings, according to the Alliance report, which notes that this inventory is slated to grow by almost 17 percent in the year ahead, with 5,776 new units in 18 buildings now under construction or planned for development. About 87 percent of these homes are currently planned as rental units, with 22 percent project to be condominium apartments.
Elsewhere, according to the Alliance, 12 new restaurants opened Downtown in the third quarter, along with four new retailers. Eight more storefronts are slated to open before the end of the year, with five additional restaurants among them.
The local market of office space continues to hover at the end of disaster, with Lower Manhattan scoring the highest vacancy rate (23.0 percent) of any community in the borough and multiple large office buildings entering foreclosure.
On a brighter note, tourism and hotel occupancy continue to rebound from pandemic-era lows, with rates of room usage topping 80 percent and outpacing the City as a whole. With “the tourism and hospitality sectors continuing to show strength, with our hotel occupancy levels nearly matching rates from just prior to the pandemic,” observed Alliance president Jessica Lappin, “the neighborhood has been injected with a fresh sense of energy this fall with the opening of the Ronald O. Perelman Performing Arts Center. This spectacular new venue is the latest in an increasingly broad array of entertainment options now found Downtown.”