Non-Profit Tenants Boost Local Commercial Space, as Rents Trend Upward
A new report from the Downtown Alliance indicates that Lower Manhattan commercial space, which has been stuck in neutral for almost five years, may be showing signs of life, chiefly due to public-service organizations like Catholic Charities of the Archdiocese of New York, the Legal Aid Society, and Uncommon Schools (a manager of free charter schools in New York, New Jersey, and Connecticut). Together, the non-profit sector accounted for more than a quarter of all new commercial leases — which totaled 682,000 square feet — signed Downtown in the three months ending September 31. This is the second-highest quarterly leasing total since 2022, representing a 16 percent bump over the prior 90-day period, and a ten percent increase over the same quarter last year.
“Leasing has remained stable, and we’re starting to see signs of the office market consolidating while it adjusts to the post-pandemic landscape,” Downtown Alliance president Jessica Lappin said. In a sign that may augur relief for commercial landlords, the three months ending in September were the third consecutive quarter marked by “positive absorption,” a real estate term of art that denotes more office space disappearing from the local inventory than being created or becoming available — primarily due to the ongoing wave of office buildings being repurposed as apartment towers. “The residential market continues to perform well, and is poised to grow even more with at least eight office-to-residential conversion projects in the pipeline,” Ms. Lappin added.
Lower Manhattan currently has 35,104 residential units in 347 buildings, the Alliance documents, with another 8,015 apartments under construction or planned for development in 19 buildings. Of these, 68 percent are intended to be rentals, and the rest are slated to be condos.
Local apartment rents in the third quarter continued to increase, reaching a median rate of $4,695 per month (surpassing the corresponding metric for the City as whole, $4,200, by 11 percent). This represents a one percent jump over the second quarter and a 17 percent increase above local rents at the start of the pandemic. For condominiums and cooperatives, sales prices softened to a median of $985,000 in the third quarter, a seven percent decline since the prior 90-day period.
During the three months ended in September, according to the Alliance, 19 new retailers opened in Lower Manhattan, 17 of them food and beverage establishments. Three restaurants closed: Nish Nush (at 41 John Street), Harry’s Italian (at 225 Murray Street, aka Goldman Alley), and 22 Thai Cuisine (at 59 Nassau Street).