COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

ALLIANCE FOR DOWNTOWN NEW YORK LOWER REAL ESTATE MARKET REVIEW Q3 2019

Small and Mid-Size Leasing Drives Strong Third Quarter in Lower Manhattan

Deals for spaces less than 100,000 sq. ft. in Lower Manhattan in the third quarter accounted for approximately 70% of leasing Lower Manhattan Year to Date Leasing Activity, activity. Small-lease deals (less than 25,000 sq. ft.) represented 2015 - 2019 30% of all new activity. Large deals (100,000+ sq. ft.) at 3 World Source: CBRE Trade Center and were among the top three leases signed, but only accounted for 30% of leasing activity. Activity among TAMI tenants, retail trade and fl exible space providers continued to diversify the district beyond fi nancial services and government.

Strong leasing momentum in Lower Manhattan continued into the third quarter with 1.81 million sq. ft. of new offi ce deals inked. Bolstered by relocations into the market, leasing activity was 38% above the fi ve-year quarterly average. With 5.61 million sq. ft. leased so far this year, this is the highest year-to-date leasing total since 2000, according to CBRE. Leasing during the past three quarters has already surpassed 2018’s year-end total.

Relocations represented 37% of quarterly leasing activity in Lower Manhattan. Of those relocations, more than half were TAMI (Technology, Advertising, Media and Information) tenants. The two largest relocations were from Midtown, while the remaining will migrate from Midtown South as that market sees record-setting rents and lack of quality space.

Midtown Manhattan saw below-average leasing with activity 32% behind the fi ve-year quarterly average — the third consecutive quarter in which the submarket trailed this benchmark. In addition to slow leasing, 12 blocks of space larger than 100,000 sq. ft. became available in the Midtown market. Activity is expected to pick up as several large leases for nearly 3 million sq. ft. are anticipated to close in the coming quarters. Midtown South surged to its highest quarterly total on record, eclipsing the fi ve-year quarterly average by 81%. The resurgence was driven by Google’s 1.3 million sq. ft. lease at 550 Washington Street, which will be part of its $1 billion new Hudson Square campus.

Strong Leasing Continues at World Trade Center The World Trade Center campus continues to drive Lower Manhattan’s leasing success. The new, high-quality offi ce space is 5.61 Million Square Feet particularly attractive to growing companies that are either priced out of other submarkets or in need of modern infrastructure. Three highest year-to-date leasing of the top fi ve leases signed during the third quarter were at 3 and (WTC), while another fi ve were signed across total since 2000 One, 3 and 7 WTC.

Lower Manhattan Real Estate Market Overview| Q3 2019 1 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

• Uber signed a 307,970 sq. ft. deal and law firm Kelly Lower Manhattan Top Leases, Q3 2019 Drye & Warren signed a 103,082 sq. ft. lease at 3 WTC, Source: Downtown Alliance, CBRE, JLL, CoStar, Colliers International both relocating from Midtown. Also at 3 WTC, Better.com SF Leased expanded by another 44,931 sq. ft. after just signing a Tenant Name Transaction Sector Location full-floor lease in the first quarter of 2019.Harper + Scott, Type a marketing agency specializing in promotional/premium Uber 307,970 goods, signed a 17,456-square-foot deal to relocate to 3 1 TAMI, Technology Relocation WTC from Midtown South. The office tower is nearly 60% leased. 130,449 District Council 37 2 Moving Within Nonprofit Spotify expanded by 85,666 sq. ft. at 4 WTC, subletting 55 Water Street • LM space from the Port Authority. Spotify now occupies nearly Kelly Drye & 567,000 sq. ft. and has exceeded space utilized by the 103,082 3 Prof. Services, Law Warren Relocation Port Authority. 3 World Trade Center At 7 WTC, Moët Hennessy signed a 83,486-square-foot • Spotify 85,666 4 TAMI, Technology relocation deal. They will join another spirits company, 4 World Trade Center Expansion Diageo, that signed a similar-size lease at 3 WTC last year. 83,732 Prof. Services, AccuWeather also announced a 13,341-square-foot Knotel 5 New LM Flexible Office move to 7 WTC. 195 Location Space Provider • Lastly, Carta, a fintech company, signed a 36,099-square- Moda Operandi 83,685 foot deal to relocate from Midtown South to One WTC. 6 Other, Retail Trade Relocation

Moët Hennessy 83,486 Other, Upstart Fashion Brands Try On Lower Manhattan 7 Relocation Manufacturing Until recently, many wouldn’t have considered Lower Manhattan a destination of choice for large retail companies and fashion NYC Dept. of 64,551 Citywide Admin. brands. But, in recent years, industry leaders such as Hugo Boss, 8 Moving Within Government J.Crew, Nike, Hudson’s Bay Company and SMCP (the Paris-based Services LM parent company of fashion brands Sandro and Maje) have all 55 Water Street 56,000 Prof. Services, relocated their corporate offices to the neighborhood. Condé WeWork 9 New LM Flexible Office Nast, Revlon and other consumer and media brands have also 83 Location Space Provider added to the Financial District’s changing character. 51,953 Prof. Services, WeWork 10 New LM Flexible Office 255 Upstart and emerging fashion companies are also choosing Location Space Provider Lower Manhattan. According to JLL, 18% of new leasing this Better.com 44,931 quarter went to retail trade and apparel companies. Moda 11 FIRE 3 World Trade Center Expansion Operandi, an e-commerce luxury fashion company, signed a 83,685-square-foot deal to relocate from Hudson Square to 195 43,374 Five Rings Capital 12 Moving Within FIRE Broadway. The company finds itself in fashionable company, 225 Liberty Street as Gucci also recently relocated its offices to 195 Broadway. LM Tommy John, a men’s underwear company, expanded at 100 US Equal Opportunity 39,721 Broadway with a 17,592-square-foot lease — they now occupy 13 Government Renewal 35,360 sq. ft. in the building. Also located at 100 Broadway are Commission 33 two emerging fashion companies — Tibi and MM.LaFleur. Faherty Carta Brand, a casual fashion line, also made a 16,500 sq. ft. move to 36,099 14 One World Trade TAMI, Technology Relocation 80 from Tribeca. Center 33,318 Giant Spoon 15 Renewal & TAMI, Advertising 44 Expansion

Lower Manhattan Real Estate Market Overview| Q3 2019 2 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Flexible Space Providers Continue to Grow Class A Offi ce Asking Rents by Submarket Flexible space providers continued to rank among Lower Q1 2018 - Q3 2019 Manhattan’s strongest dealmakers in the third quarter, with Source: Cushman & Wakefi eld three transactions reaching nearly 192,000 total sq. ft. More than 820,000 sq. ft. have been leased so far this year by a variety of fl exible space providers. • Knotel signed an 83,732-square-foot expansion at 195 Broadway. They now have 10 locations in Lower Manhattan. • WeWork signed two mid-size deals this quarter, including 56,000 sq. ft. at 83 Maiden Lane and 51,953 sq. ft. at 255 Greenwich Street. There are now 14 WeWork locations across 1.3 million sq. ft. in Lower Manhattan— amounting to 1.5% of the total Downtown market. Lower Manhattan is home to the fewest WeWork locations among the Manhattan submarkets. WeWork has over 3.3 million sq. ft. across 32 locations in Midtown and 2.8 million sq. ft. across 43 locations in Midtown South.

Lower Manhattan Maintains Pricing Advantage According to Cushman & Wakefi eld, Lower Manhattan’s overall average asking rent decreased modestly by 1.3% to $62.87 Lower Manhattan vs. Midtown South per sq. ft.. Class A asking rent remained near historical highs Offi ce Asking Rent Price Differential at $66.70 per sq. ft., dropping only slightly from the previous $32 Avg. Class A Office Asking Rent quarter as higher-priced space was leased at 3 World Trade Center. The average Class B asking rent reached an all-time $19 Avg. Overall Office Asking Rent high at $59.03 per sq. ft., growing 6.6% over the past year - a result of higher-priced, 200,000-sq. ft. blocks entering the market at 110 William Street and One Broadway. Overall Offi ce Asking Rents by Submarket Q1 2018 - Q3 2019 In Midtown, overall average asking rents were $76.41, roughly Source: Cushman & Wakefi eld consistent from last quarter. Class A average asking rents were $82.22. Midtown South’s overall asking rents at $81.67 per sq. ft. grew nearly 7% year-over-year, though down slightly from last quarter’s record pricing. This is the fi fth consecutive quarter where overall rents in Midtown South have exceeded rents in Midtown. Midtown South’s Class A direct-average asking rent (defi ned as Class A available offi ce space not $62.87 priced as a sublease) reached an overall average astounding $108.47 — a $7.23 per sq. asking rent in ft. increase — due to new availabilities Lower Manahttan in West Chelsea and around Madison Square Park.

Lower Manhattan continues to maintain a substantial pricing advantage compared to other Manhattan submarkets, most notably to Midtown South. Lower Manhattan’s average asking rents are $32 per sq. ft. below Midtown South’s average for Class A offi ce space and nearly $19 below for overall offi ce

Lower Manhattan Real Estate Market Overview| Q3 2019 3 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

space — both record differentials. The difference between direct Class A offi ce space (not subleased) is even larger, as Lower Manhattan space is an astounding $40 per sq. ft. (on average) Success Breeds Success: How cheaper than Midtown South. The expansion of the technology Hudson Square’s Evolution Helps sector in Midtown South has left that market with limited Fuel Lower Manhattan’s Leasing availabilities and record-setting pricing. While Class A rents in Lower Manhattan have remained at their highest levels in the Not all dynamics in real estate represent a zero sum submarket’s history, many tech tenants in Midtown South that game. Sometimes there are two winners. As Google are looking to expand have taken note of the district’s sizable and Disney plan major, exciting expansions in Hudson rent differential. Square and remake the face of that subdistrict, 13 tenants, totaling nearly 605,000 sq. ft., have relocated from Hudson Square to Lower Manhattan, including Average Offi ce Vacancy Rate Moda Operandi, Carta, Rafael Vinoly and Cision PR According to Cushman & Wakefi eld, Lower Manhattan’s vacancy Newswire. Tenants like those are increasingly taking rate stood at 11.1% in the third quarter, down from 12% one advantage of Lower Manhattan’s more affordable offi ce year ago. The decrease can be attributed to sizeable leasing transactions, particularly at the World Trade Center, as well as rents and abundance of modern space. Nine of those 13 limited new availabilities. Across offi ce tenants relocated to the World Trade Center submarket class types in Lower Manhattan, Class 11.1% within Lower Manhattan, accounting for 66% of the A vacancy decreased signifi cantly from relocated sq. ft. total. overall 13.8% to 10.9% year over year. Class B vacancy rate in and C offi ce vacancy increased to 12.4% Lower Manahttan Google’s announced $1 billion, 1.7 million square- and 8.9%, respectively. foot campus in Hudson Square will involve the Meanwhile, Midtown’s overall vacancy rate increased to 11.1% redevelopment of the St. John’s Terminal Building at 550 as six large blocks became available. Midtown South’s vacancy Washington Street, as well as lease agreements at 315 decreased to 8.1%, as that market set its highest quarterly and 345 Hudson Street. The Walt Disney Company will leasing activity on record. relocateManhattan from the Upper West Side to build a 1.3 million- square-foot offi ce tower at 4 Hudson Square. These two developments have sent a cohort of businesses looking southwards to Lower Manhattan for advantageous rents and state-of-the-art buildings. Lower Manhattan’s price advantage is a magnetic pull for tenants. According to Cushman & Wakefi eld, average Class A asking rents in Hudson Square now stand at $121.61, while overall rents are $98.31. Across the Downtown market, average Class A asking rents now stand at $66.70, while overall rents are $62.87. Those pricing differentials can on average range between $25 and $55 per sq. ft.

Rendering of Google Hudson Square at 550 Washington Street by COOKFOX Architects

Lower Manhattan Real Estate Market Overview| Q3 2019 4 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Third Quarter Property Sales Two property sales occurred during the third quarter. Recent pending sales announcements: • 195 Broadway - JPMorgan’s asset management arm is in A 102,000-square-foot, 17-fl oor, 499-bed (225-unit) student housing contract to sell its 95% stake in 195 Broadway for $775 million building at 55 John Street was sold by Tessler Developments to to a partnership between Korea Investment & Securities, Education Housing Services (EHS) for $101 million. EHS, which Samsung and L&L Holdings. L&L already owned a 5% stake. typically manages student housing on behalf of landlords, had been The 29-story, 973,000-square-foot offi ce building has Gucci, the sublandlord at the building prior to buying it outright. HarperCollins Publishers, Omnicom and Nobu as tenants. The property has undergone a $100 million renovation in recent The sale of 7 Hanover Square from Guardian Life Insurance Company years. L&L bought the building in 2005 for $266 million. to GFP Real Estate, the Northwind Group and TPG Real Estate Partners • 111 Wall Street - Nightingale Group and Wafra Capital Partners offi cially closed. The deal was announced in January 2019. The are acquiring the leasehold interest of 111 Wall Street for 846,415-square-foot offi ce building was purchased for $308 million. approximately $570 million. The 24-story, 1.1 million-square- Guardian Life, which has been a tenant in the property since 1998, is foot offi ce tower is being sold by Omnispective Management relocating to Hudson Yards. Corp. and Zurich Insurance Group. Citigroup plans to move all • The building is now undergoing a $250 million modernization remaining employees at 111 Wall to its headquarters at 388 and renovation. The new owners are turning the building into Greenwich Street in December 2019. Once vacant, the new two separate portions with addresses at 50 Water Street owners will undertake a renovation of the property. (building’s base) and 100 (top fl oors). In addition, • One Whitehall Street - The 21-story, 387,390-square-foot plans are also in the works to add retail at the base, including a offi ce building is in contract for roughly $182 million. Rudin possible food hall. Management Company is selling to the Chetrit Group. • The owners have already leased nearly 527,000 sq. ft. of offi ce • 175 Water Street - According to published reports, Metro Loft space at 50 Water Street to NYC Health + Hospitals, the largest is in contract to buy AIG’s 31-story, 684,000 SF offi ce tower deal recorded in Q1 2019. for $270 million. Plans are to convert the offi ce building into residential once AIG’s lease expires in 2021. Metro Loft has converted more than 3 million sq. ft. across 10 Financial District offi ce buildings to residential rentals, including most recently 20 Broad and 180 Water.

7 Hanover Square Sold 55 John Street Sold

Rendering of 50 Water/100 Pearl Street by VisualHouse

Lower Manhattan Real Estate Market Overview| Q3 2019 5 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

RETAIL MARKET

New Openings and Announcements In the Seaport District, Bar Wayō, a Japanese bar and restaurant by David Chang, and Malibu Farm, a healthy California-based eatery, opened on Pier 17. McNally Jackson Books and Alexis Bittar opened on Fulton Street. A new restaurant by Andrew Carmellini is expected to open later this year on Pier 17.

At Brookfi eld Place, M.M.LaFleur, a women’s boutique, and Pink, a men’s shirt store, opened. Convene will open its 73,000 sq. ft. meeting and events space in early November; For Five Cafe will also open within the space. Later this year, Clean Market, a wellness-oriented store, and Sant Ambroeus, the chic Italian restaurant, will open. Shakespeare & Photo by Gary He for Eater Co., an independent bookstore, anticipates an early 2020 opening. Bar Wayō, a Japanese bar and restaurant by David Chang, opened Westfi eld World Trade Center welcomed new retailers to the complex, on Pier 17 in the Seaport District. including Brooklyn Bleu and Michele Lopriore. More food options are on the horizon with Just Baked, Doughnut Plant and Taco Dumbo in the near future.

Thirty-six new retailers opened in Lower Manhattan in the third quarter, including: • Chikarashi Isso, a Japanese restaurant, at 38 Rector Street; • Gnoccheria, an Italian restaurant and bar, at 100 Broad Street; • Revolution Cantina at 53 ; Photo by Liz Clayman for Malibu Farm • fast casual eateries Cava and &Pizza at 63 Wall Street, Los Tacos No. 1 at 136 Church Street and Blue Bottle Coffee soon at 20 Malibu Farm, a healthy California- Broad Street; based eatery, opened on Pier 17 in the Seaport District. • Blo Blow Dry Bar at 105 Nassau Street and City MD at 20 Broad Street.

Courtesy of Chikarashi Isso

Chikarashi Isso, a Japanese restaurant, opened at 38 Rector Street.

Lower Manhattan Real Estate Market Overview| Q3 2019 6 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

TOURISM / HOSPITALITY MARKET

Record Year for Tourism Lower Manhattan Hotel Development Pipeline Source: Downtown Alliance Lower Manhattan continues to be a growing destination for tourists. Owner/ Open In 2018, approximately 14.6 million tourists visited Lower Manhattan, Hotel / Address Rooms Floors Developer Date up 7% from 20171. The proportion of international visitors coming to 120 the neighborhood rose from 50% in 2017 to 53% in 2018. As a whole, Residence Inn 1 215 Pearl Street Lam Group (upper 40 2019 welcomed a record 65.2 million tourists in 2018, a floors) 3.8% increase over 20172. This is the ninth straight year that the city’s Courtyard by 200 2 Marriott Lam Group (lower 40 2019 tourism numbers have increased. Citywide tourism is expected to grow 215 Pearl Street floors) to at least 67 million visitors in 2019. Premier 3 The Fidi Hotel 143 27 2020 Hotels Check-in to Lower Manhattan 11 Stone Street Emerald LLC At the end of the third quarter, there were 7,945 rooms in 37 hotels Hotel Indigo Atlas 4 120 Water Street Hospitality 122 31 2020 throughout Lower Manhattan. More than 1,700 hotel rooms in 15 Casa Cipriani Centaur hotels are currently in the development pipeline. In 2019, hotel- 5 Battery Maritime Properties/ 41 5 2020 room inventory in Lower Manhattan is expected to grow by nearly 8% Building Cipriani over last year. While no hotels opened in the third quarter, the hotel Fit 6 Aloft Hotel Investment 173 29 2021 inventory in Lower Manhattan will reach 8,265 rooms by year-end 50 Trinity Place Group 2019. Those scheduled to open include: TBD Hotel 7 88 Wall Street Actium Dev. 181 14 2021 • Courtyard by Marriott at 215 Pearl Street (lower floors), 200 rooms; and TBD Hotel Hidrock 8 112 Liberty Street Realty 230 30 2021 • Marriott Residence Inn at 215 Pearl Street (upper floors), 120 rooms. TBD Hotel 9 86 Warren Street Solil Mgmt. 70 11 2021

Additionally, the former Club Quarters, Wall Street at 289 William Hotel Indigo 10-12 10 8-12 Maiden Lane MLane Inc. 190 25 TBD Street was rebranded the Radisson Wall Street. Firmdale Hotels, which manages the Whitby and Crosby Street Hotels, was announced TBD Hotel Roe 12 11 Corporation 80 TBD as the operator for the proposed 70-room boutique hotel at 86 265 Broadway (of 42) Warren Street. TBD Hotel Clarion 12 American Stock Partners/ 174 14 TBD Exchange Building GHC Dev. Occupancy and Average Daily Room Rate TBD Hotel 13 212 Pearl Street Chaon LLC 48 21 TBD The third quarter’s average occupancy was 88.5%, up by one TBD Hotel percentage point year over year. Lower Manhattan’s hotel occupancy Hidrock 14 140-142 Fulton Realty 41 TBD TBD rate was slightly below citywide trends at 90.1%. Lower Manhattan’s Street average daily room rate (ADR) in the third quarter of 2019 was TBD Hotel Tom 15 21 Park Place Grainger 14 11 TBD $261.77, on par with last year. New York City’s ADR, about $30 more than Lower Manhattan’s ADR, decreased slightly year over year to Total Hotels in the Pipeline 15 $2913. Total Hotel Rooms in the Pipeline 1,789

1 Source of Lower Manhattan tourism estimates: Audience Research & Analysis 2 Source of New York City tourism figures: NYC & Company 3 Source of preliminary New York figures: NYC & Company

Lower Manhattan Real Estate Market Overview| Q3 2019 7 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

RESIDENTIAL MARKET

Inventory and Development Continue to Expand Lower Manhattan Residential Development Source: Downtown Alliance Lower Manhattan has 33,223 units in 336 mixed-use and residential buildings. 108 Chambers Street, a small new construction development Lease / Open Address Units by Greystone Development with eight full-floor condo units, opened in Building Type Date the third quarter. There are nearly 2,900 units in 16 buildings under Condo / Rental Units construction or planned for development, with 35% currently planned Under Construction TOTAL 2,042 as rental units and 65% condos. The remaining residential development 1 33 Park Row Condo with plans to open in 2019 include 172 units in three buildings under New Construction 31 2019 construction (100% condo). Among them: 2 30 Warren Street Condo 23 2019 • 30 Warren Street - Construction continues on Cape Advisors’ New Construction 12-story, 23-unit boutique condo building; 3 25 Park Row Condo 110 2019 • 33 Park Row - Urban Muse’s 25-story, 31-unit condo tower New Construction adjacent to City Hall Park, is finalizing construction; and 4 161 Maiden Lane Condo 2020 New Construction 80 • 25 Park Row - The collection of buildings along Park Row, once occupied by J&R Music and Computer World, will soon 5 45 Park Place Condo 2020 New Construction 50 become a 54-story, 110-unit condo tower. The new residential tower, developed by L&M Development, will include nearly 69 West Condo 6 Broadway New Construction 24 2020 60,000 sq. ft. of office and retail at the base of the tower. 7 77 Greenwich Condo 90 2020 Residential Rental and Sales Market Street New Construction According to residential statistics published by Miller Samuel/Douglas One Wall Street Condo 8 Conversion 566 2020 Elliman, the median rent in Lower Manhattan increased by 5.4% over last year to $4,000, the first time to cross this threshold. Meanwhile, Condo 9 Street 244 2020 Manhattan’s overall median rent trended up 2.3% year-over-year to $3,525. New Construction The increase in median rents was seen across Manhattan due to a weaker 125 Greenwich 10 Condo 273 2021 sales market. Potential buyers have been staying in the rental market until Street New Construction they are more comfortable. 2 Washington Rental 11 Street Conversion 345 2021 The median sales price for co-ops and condos fell dramatically to $932,000, down over 13% from last quarter. The sharp decrease in median 12 Condo 206 2021 sales prices was a result of new state tax laws that went into effect in New New Construction York City (the lower end of high-end buyers rushed to close during the third Condo / Rental Units TOTAL 795 quarter because they are more affordability-pressured). In Development Hotel/Condo Lower Manhattan’s average price per square foot (PPSF) of $1,239 saw 1 265 Broadway New Construction 37 2021 a decrease of 3.1% over the past quarter and a year-over-year decrease Rental of 3.6%. A decrease in high-end sales activity resulted in a decline of the 2 185 Broadway New Construction 279 2021 average price and PPSF. Rental/Condo 3 75-83 Nassau 229 2021 Street New Construction Rental 4 3 Platt Street New Construction 250 TBD

TOTAL UNITS IN THE PIPELINE 2,837

Lower Manhattan Real Estate Market Overview| Q3 2019 8 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Lower Manhattan Median Residential Rent, Q1 2015 - Q3 2019 Source: Miller Samuel/Douglas Elliman

Lower Manhattan set a record, with median rents now at $4,000. The increase in median rents was due to a weaker sales market.

Lower Manhattan Median Condo Sales Price, Q1 2015 - Q3 2019 Source: Miller Samuel/Douglas Elliman

The sharp decrease in median sales price was a weaker sales market as a result of new state tax laws that went into effect in New York City.

Lower Manhattan condo sales are returning to normal patterns as the luxury legacy contracts Lower Manhattan Average Price Per Square Foot (PPSF), Q1 2015 - Q3 2019empty. Source: Miller Samuel/Douglas Elliman

The decrease in average PPSF was due to a weaker sales market as a result of new state tax laws that went into effect in New York City.

Lower Manhattan Real Estate Market Overview| Q3 2019 9 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

MAJOR PROJECTS UPDATE

World Trade Center The Ronald O. Perelman Performing Arts Center (The Perelman Center) Construction continues at the World Trade Center on the Ronald O. Perelman Center for Performing Arts, known as The Perelman Center. The center has raised 84% of its expected $390 million construction cost. The approximately 110,000-square-foot, cube-shaped building will feature three theaters which can be combined in various seating confi gurations for an array of unique performance spaces. The project anticipates completion in late 2021.

Site 5 The Port Authority of New York and New Jersey and the Lower Manhattan Development Corporation (LMDC) recently released an RFP for 5 World Trade Center (aka Site 5 or Albany Plaza). Responses were required by end of September 2019. The parcel can accommodate a 900-foot tower with 1.3 million sq. ft. of commercial or mixed-use development. The square footage could be used for an offi ce tower, or an 800-key hotel, up to 150,000 sq. ft. of convention space and up to 45,000 sq. ft. of retail. The Port Authority and LMDC are also considering residential uses for the site.

3 World Trade Center Transit Lobby The 3 World Trade Center transit lobby opened in September, which will provide employees of the offi ce tower and the public another access The Robert R. Douglass pedestrian point for PATH, subways and the Westfi eld shopping complex. bridge opened. The bridge spans over West Street and opens onto a new, privately-owned public plaza at 50 76 Trinity Place West Street. The structure replaces the Trinity Real Estate’s 74 Trinity Place, a 26-story, 310,000-square-foot Rector Street pedestrian bridge. offi ce building, is wrapping up construction. The bottom fi ve fl oors will be for community use, fl oors six through eight will be used for Trinity Church’s offi ces (their move-in date is slated for this spring) and the remaining 17 fl oors will be rentable offi ce space. The existing pedestrian bridge across Trinity Place will eventually reconnect to Trinity Church.

Infrastructure Robert R. Douglass Pedestrian Bridge The Robert R. Douglass pedestrian bridge (formerly known as the West Thames Street pedestrian bridge), which began construction in 2017, has opened to the public. Spanning over West Street, the 230-foot bridge opens onto a new, privately-owned public plaza at 50 West Street. The structure replaces the Rector Street pedestrian bridge, which will be Photo by World Trade Center deconstructed in the near future. The 3 WTC transit lobby opened, giving workers and the public another access point for PATH, subways and the Westfi eld shopping complex.

Lower Manhattan Real Estate Market Overview| Q3 2019 10 COMMERCIAL OFFICE RETAIL TOURISM / HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Warren, John and Front Streets Reconstruction Resiliency Reconstruction of Warren Street (from Broadway to West Street) and NYCEDC has approved a team of 18 consultants lead by Arcadis, a John Street (from Broadway to William Street) are both scheduled for Netherlands-based design and engineering fi rm, to develop the Financial completion late this fall. Once fi nished, a similar reconstruction will begin District and Seaport Climate Resilience Master Plan. That framework on Front Street between Old Slip and John Street. These projects will will present locals with options for expanding the shoreline of those replace all underground infrastructure, including water mains, sewers, neighborhoods as much as 500 feet into the waterway to defend the electric, gas and other utilities, as well as construct new streets and area against climate change. curbs.

Water Street Streetscape Project Downtown Alliance and Battery Park City Authority Expand Free Wi-Fi In spring 2019, the New York City Economic Development Corporation The Downtown Alliance and Park City Authority (BPCA) will begin work on a long-awaited streetscape and public realm have together added 1.5 million sq. ft. of free Wi-Fi coverage in Lower enhancement project along the Water Street corridor. The project will Manhattan. This expansion improves coverage in Nelson A. Rockefeller, transform two temporary public plazas at Coenties Slip and Whitehall Teardrop and Robert F. Wagner, Jr. Parks along the Hudson River and Street into permanent public spaces featuring new landscaping, brings Battery Park City into the broader #DwtwnAllianceFreeWiFi seating and concessions. The project will also plant street trees, rebuild network, which now spans six million sq. ft. across Lower Manhattan. sidewalks and enhance pedestrian safety from Whitehall Street to Old The next phase of this partnership, scheduled for 2020, will aim to cover Slip. The $22.8 million project is expected to take around 24 months to large portions of the Battery Park City’s Esplanade. This expansion was complete. made possible by support from BPCA, while support for the existing network is provided by WilmerHale, a leading international law fi rm located at 7 World Trade Center.

Elizabeth H. Berger Plaza Ground was broken for Elizabeth H. Berger Plaza in early September. Named after the late Downtown Alliance president, the public space will combine two existing underutilized concrete plazas into a single, large plaza. The 29,000 sq. ft. park will eliminate an extraneous two-lane exit ramp for the Brooklyn Battery Tunnel and feature a grass lawn, trees and landscaping, seating and paved pathways. Completion is expected in summer 2020.

Bowling Green Shared Street The New York City Department of Transportation announced a pilot pedestrian program to transform Whitehall Street (between Morris and Beaver Streets) near Bowling Green park this fall. The street will be shared by both pedestrians and vehicles and will feature realigned, shorter crosswalks, widened sidewalks, pedestrian protections around the statue and an advisory 5MPH speed limit.

Lower Manhattan Real Estate Market Overview| Q3 2019 11 Visit www.downtownny.com/research-statistics for additional publications on the

Lower Manhattan real estate market and economy. Documents include a complete list of

residential and hotel developments, available retail spaces, a summary of leasing incentives

and other research reports, including:

Lower Manhattan Real Estate 2018 Year in Review, an annual real estate report providing a review of commercial office, retail, residential, hospitality and development projects that happened in 2018.

Lower Manhattan: New York City’s Premier Transit Hub, a report demonstrating the strength of Lower

Manhattan as one NYC’s premier multimodal hubs and needs/opportunities for future improvements.

An Untapped Market: Lower Manhattan’s Young Professionals, a residential survey highlighting Lower

Manhattan as a neighborhood of choice for young professionals in New York City, as well as ways to capture residents’ robust appetite for dining out and entertainment.

Surging Ahead: Lower Manhattan’s Economic Revival and What It Means For New York, a report on the major advances in Lower Manhattan’s economy expected over the next five years as a result of post-

September 11 investments and the area’s status as a burgeoning center for some of New York City’s most valuable, dynamic industries.

The Brain Gain, a report on how the region’s shifting demographics continue to favor the Lower

Manhattan Business District.

If you have questions or require additional information,

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