Rents, Condo Prices, and Hotel Rates All Surge, While Offices Sit Empty
The Downtown Alliance has released its analysis of real estate activity for the second quarter of 2024, which shows that local apartment rents are increasing faster than in Manhattan as a whole, with median rent surging to $4,655 (the second highest value the district has ever seen). For Manhattan overall, median rent is now $4,200. For condominiums and cooperatives, the median residential sales price in Lower Manhattan increased 13.7 percent from April 1 through June 30, to $1,057,000.
Downtown has also experienced an influx of planned new apartments, thanks to deals at 111 Wall Street and 222 Broadway — legacy office buildings at which developers have announced plans to create 1.6 million square feet of new dwellings.
Leases for office space in Lower Manhattan fell by 48 percent year over year, and were below their five-year average by 25 percent. Overall, approximately one quarter of Downtown office space is now vacant.
In the hotels and tourism sector, the Alliance report notes, “the second quarter saw Lower Manhattan’s hotels continue to record occupancy and [average daily rate] figures exceeding pre-pandemic levels, indicating a full recovery following the pandemic.” Downtown hotels notched an occupancy rate of 89 percent in the April-through-June period, when the average daily room rate was $317.06 (the second-highest level ever reached by this metric).
“While the office market remains slow but stable, our hospitality sector has taken off, with record numbers of visitors filling up our Lower Manhattan hotels,” said Downtown Alliance president Jessica Lappin. “Tourism is back across the City, but our hotels have eclipsed even the Midtown and City-wide occupancy rates.”
In terms of retail, the Alliance report documents that 14 new storefronts opened in the second quarter, most of which were food and beverage businesses.