Major Projects Update

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Major Projects Update EMPLOYMENT & OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE ALLIANCE FOR DOWNTOWN NEW YORK LOWER MANHATTAN REAL ESTATE MARKET OVERVIEW Q2 2016 COMMERCIAL OFFICE MARKET Lower Manhattan’s commercial market sent mixed signals through the second quarter of 2016, echoing trends also seen in other Private Sector Employment submarkets. Office leasing was on par with activity last year but still below the historical average, and news of new major tenant Total Private relocations remained quiet. Despite this, there were clear areas 232,200 Sector Workers of strength. The vacancy rate is currently below 10 percent, and key Lower Manhattan companies committed to stay or expand Additional Workers in new locations south of Chambers Street. The arrival of new 5,100 Year Over Year commercial tenants and the opening of hotels and retail has pushed Lower Manhattan’s private sector employment to grow, workers or 2% growth year over year. The employment expansion reaching a new post-2001 peak of more than 232,000 employees cuts across all the key sectors that have been fueling Lower 1 as of the end of 2015. Manhattan’s economy and leasing activity. EMPLOYMENT The hotel, retail and restaurant sectors added the largest share of employees to Lower Manhattan over the course of 2015. These Private sector employment climbed to nearly 232,200 employees as industries grew by more than 2,000 employees or 10%. More than of the end of 2015, marking the sixth consecutive year of growth and 58 stores and restaurants were added to the retail market, including the highest point since Lower Manhattan had 236,700 private sector Brookfield Places’ offerings as well as three hotels with over 433 rooms.2 employees at the end of 2001. This reflects a net growth of 5,100 1 Reflects latest data available. Source: New York State Department of Labor, Q4 2015 data 2 Reflects net growth in retailers and restaurants PRIVATE SECTOR EMPLOYMENT GROWTH, 2001 - 2015 Source: New York State Department of Labor 240,000 236,737 Peak Employment 232,150 Since 2001 230,000 220,000 214,320 211,405 210,000 200,000 199,491 190,000 180,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Note: Reflects Q4 Data only. Lower Manhattan Real Estate Market Overview| Q2 2016 1 EMPLOYMENT & OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE Lower Manhattan’s employment market also experienced growth in many of the sectors that have driven office leasing activity and the diversification of Lower Manhattan’s economy in recent years. Education and Healthcare added more than 1,300 employees to the private sector. New schools from pre-K to colleges and Westfield World Trade Center, which includes professional programs have opened their doors, and new healthcare 365,000 square feet of retail, shops and dining, tenants (such as Planned Parenthood at 123 William Street and will be one of Lower Manhattan’s major employers th Progenics Pharmaceuticals at One World Trade Center) have made when it opens its doors on August 16 , 2016. More their headquarters south of Chambers Street. Other office-using than 120 stores and restaurants in the Oculus, industries, such as Professional Services and Information and as well as Fulton Center, are expected to employ Media, have also expanded. Significant media companies– such an estimated 10,000 full and part-time workers. as TIME, which relocated in late 2015– are driving an increase in Westfield held a job fair as well as interview skill Information sector employment, which expanded by more than and resume-building seminars during late June at 1,100 employees in the final quarter of 2015 alone. the Conrad Hotel to attract retail employees. Hotel, Retail and Restaurant employment currently totals more than 21,700 employees in Lower Manhattan and can only be expected to rise as Westfield and other major retail additions– such as the complex Education & Healthcare of stores and dining at Pier 17 and Saks Fifth Employment Up Avenue at Brookfield Place– are unveiled over the next year. The Downtown Alliance published an economic impact study, Surging Ahead, detailing 1,300 anticipated employment growth in the hotel, retail Workers Year Over Year and restaurant sectors, as well as other sectors, in late 2015. To view, please click here. GAINS IN PRIVATE SECTOR EMPLOYMENT BY INDUSTRY, Q4 2014 - Q4 2015 Source: New York State Department of Labor 2,500 2,016 2,000 1,500 1,371 1,000 695 646 646 Private Sector Employees 526 500 99 Hotel, Retail Education Other FIRE Administrative Professional Information & & Social Services & Support Services Restaurants Services Note: Other Services includes personal services, such as repair shops, launderies, hair salons, health clubs, as well as a variety of nonprofits, unions, trade associations, etc. Lower Manhattan Real Estate Market Overview| Q2 2016 2 EMPLOYMENT & OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE LEASING ACTIVITY Lower Manhattan leasing activity was quiet through mid-year, NEW LEASING ACTIVITY BY INDUSTRY IN mirroring the citywide trend of below average activity. Totaling 1.07 LOWER MANHATTAN, Q2 2016* million square feet, according to CBRE, second-quarter leasing is Source: Jones Lang LaSalle down 20% from the five-year average but up 11.5% from a sluggish Other first quarter. Second quarter activity was buoyed by existing Lower Professional Services Services 4% Manhattan tenants signing large deals to expand or move to new 10% spaces throughout the district. FIRE Through mid-2016, Lower Manhattan’s leasing activity totals just over 37% two million square feet, on par with last year’s pace at this time. Year- Education, Healthcare & Q2 2016 to-date leasing activity is still down 16% from the five-year average. Nonprofit New Leasing 22% Activity by Overall, second quarter leasing was largely driven by major FIRE and Industry Government tenants either committing to stay or expanding. These include the New York City Department of Finance, which inked the largest deal of the quarter with a commitment for 182,750 square feet at the recently repositioned 375 Pearl Street. The city agency will be moving some executive level offices and relocating Brooklyn operations to the 1.1 million-square-foot property. The Department TAMI of Finance currently has a 400,000-square-foot lease at 66 John 27% Street, not set to expire until 2024. QBE North America, an *By square footage LOWER MANHATTAN YTD LEASING ACTIVITY, 2012 - 2016 Source: CBRE 4.0 Million 3.5 MSF 3.5 Million 3 Million 2.5 Million 2.46 MSF 2.02 MSF 2.01 MSF 2.03 MSF SF 2 Million Q2 1.5 Million Q2 Q2 Q2 1 Million Q2 500,000 Q1 Q1 Q1 Q1 Q1 0 2012 2013 2014 2015 2016 Lower Manhattan Real Estate Market Overview| Q2 2016 3 EMPLOYMENT & OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE LOWER MANHATTAN TOP LEASES, Q2 2016 insurance company, is relocating from a 99,379-square-foot space Source: Downtown Alliance, CBRE, JLL, CoStar, Colliers International in 88 Pine Street to 97,228 square feet in 55 Water Street, making it Tenant Name SF Leased Sector the second largest lease of the quarter. Location Transaction Type 182,750 Expansion & NYC Department of Finance 1 Relocation from Government The World Trade Center also made gains this quarter due to FIRE 375 Pearl Street Brooklyn offices tenants choosing to stay in Lower Manhattan or expand operations. to LM Hudson River Trading, a financial technology company, signed a 97,228 QBE Insurance 2 Moving Within FIRE commitment to expand and move from 30,351 square feet in 32 Old 55 Water Street LM Slip to a 69,000-square-foot space on floors 57 and 58 in 4 World 69,000 Hudson River Trading Trade Center. Another current Lower Manhattan tenant, Ameriprise 3 Moving Within FIRE 4 World Trade Center Financial, LM & Expansion signed a lease for 37,000 square feet at One World Trade Center. Paradigm Talent Agency 50,604 4 Other, Arts 140 Broadway Relocation The Port Authority of New 41,516 While there was a lack of blockbuster relocations, there were some 5 York & New Jersey Government Renewal 115 Broadway healthy mid-size deals announced within the Education, Healthcare, 37,704 and TAMI sectors. TAMI’s share of leasing activity held steady Ameriprise Financial 6 Moving Within FIRE One World Trade Center from past quarters, with a 27.1% share. Deals announced in this LM Premier Home Health Care sector include Allied Advertising Public Relations’ relocation from 34,274 7 Services Healthcare Midtown to 28,098 square feet in 233 Broadway. In addition, Radio New LM Location 4 New York Plaza One, a cross-platform brand sales and marketing firm, will move to Fitapelli and Schaffer 28,329 Professional 8 a 26,810-square-foot office in 4 New York Plaza. Finally, Paradigm 28 Liberty Street Relocation Services, Law Talent Agency, an entertainment and literary talent agency, signed Allied Advertising 28,098 TAMI, Public 9 a 50,604-square-foot lease to relocate to 140 Broadway from the 233 Broadway Relocation Relations Madison Square Park area. Paradigm’s clients are in many of the IPsoft 27,199 TAMI, 10 industries that have seen rapid growth in Lower Manhattan over the 7 World Trade Center New LM Location Technology past several years, including digital media, book publishing and television. Radio One 26,810 11 TAMI, Media 4 New York Plaza Relocation Brennan Center for Justice 25,476 Overall, Education and Healthcare accounted for 23% of new leasing 12 at NYU School of Law Nonprofit Relocation this quarter, up from 6% in the first quarter, according to Jones 120 Broadway Lang LaSalle.
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