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OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

ALLIANCE FOR DOWNTOWN NEW YORK Q2 2015 LOWER REAL ESTATE MARKET OVERVIEW COMMERCIAL OFFICE MARKET Leasing Activity Rising private sector employment and large, pending commercial moving to : Gucci finalized a lease for 83,964 leases indicate a strong commercial market in Lower Manhattan square feet at 195 . The luxury retailer will be moving in the months ahead, even as year-to-date leasing drops from from Midtown in the first quarter of 2016. record levels in 2013 and 2014. Despite this, the vacancy rate has remained steady year over year at 10.3%. Several other large deals were announced in the second quarter at the World Trade Center but are not yet finalized. In June, According to CBRE, Lower Manhattan’s second quarter leasing 21st Century Fox and News Corp. signed a letter of intent with activity totaled 860,000 square feet, 38% below the five-year Silverstein Properties to anchor 1.3 million square feet in the average. Year-to-date leasing is also lagging historical averages; at future . As part of the deal, Bjarke Ingels has 2.01 million square feet, activity is 24% below the five-year average. been hired to redesign the proposed 80-story, 2.8 million square foot office tower in order to best serve the needs of the media and However, leasing activity is expected to accelerate in the second television companies. This deal has the potential to be the largest half of the year and to bolster 2015 annual totals. Several large transaction in Lower Manhattan in 2015, and the company’s deals have already closed in July, and several more are still relocation would further cement Lower Manhattan’s status as pending. a media center in New York . At , Moody’s is expected to announce a lease for 80,000 square feet, In early July, Ironshore finalized its lease for 101,958 square feet an addition to its current 836,902 square-foot Lower Manhattan in , which was previously announced in April 2015. footprint in the 100% leased . A Moody’s Ironshore will be relocating and expanding from 50,000 square feet expansion deal would mean that One World Trade Center is 66% in 1 . July also brought news of a major fashion icon leased (it is currently 63% leased).

LOWER MANHATTAN LEASING ACTIVITY, Q2 2011 - Q2 2015 Source: Downtown Alliance, CBRE

2.0 Million

1.8 Million

1.6 Million 5-Year Quarterly Average: 5-Year Quarterly A1v.e3r8a gMei:l 1lio.3n8 S MF illion SF 1.4 Million d d 1.2 Million e e s s a a e e 1.0 Million L L 860,000

F F S S 0.8 Million

0.6 Million

0.4 Million

0.2 Million

0.0 Million Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015

Lower Manhattan Real Estate Year in Review | Q2 2015 1 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Second Quarter Leasing Trends LOWER MANHATTAN TOP 15 LEASES, Q2 2015 Source: Downtown Alliance, CBRE, CoStar, Colliers International, Newmark Grubb The second quarter’s top deals reflected the growing diversity Knight Frank of the Lower Manhattan office market, with activity in new Tenant Name SF Leased growth industries — such as coworking providers — as well as Sector Location Transaction Type the traditional FIRE sector. According to Jones Lang LaSalle, Morgan Stanley the FIRE sector and Professional/Business Services sector, 68,325 1 Smith Barney FIRE Expansion which includes coworking, accounted for 27% and 42% of all new leasing activity, respectively. TAMI (growth industries Port Authority of NY & NJ 62,250 2 Government including Technology, Advertising, Media and Information) 115 Broadway Renewal uncharacteristically lagged this quarter, accounting for less Globe Tax 60,000 3 FIRE than 2% of all new activity. With below-average leasing activity, 1 New York Plaza Moving Within LM the absence of TAMI this quarter was a drag on the market Cowork|rs 40,000 Professional 4 and demonstrated the importance of these sectors to Lower 60 Expansion Services Manhattan’s commercial market. Cowork|rs 30,000 Professional 5 55 Broadway Expansion Services Holborn Companies 29,878 Morgan Stanley Smith Barney signed the largest deal in the 6 FIRE 180 Moving Within LM second quarter, committing to an expansion space of 68,325 Dixon Advisory USA 25,391 square feet in 1 New York Plaza where it already occupies more 7 FIRE 1st NYC office than 747,000 square feet. In addition, Dixon Advisory, a Jersey MCIC Vermont, Inc. 22,255 City-based REIT advisor, committed to opening its first New York 8 FIRE 125 Broad Street Moving Within LM City office in a 25,391 square-foot space in 140 Broadway. United Synagogue of 16,331 9 Conservative Judaism Nonprofit Relocation The coworking and flex office space industry continued to 120 Broadway expand its stake in Lower Manhattan with two new leases signed Banco Popular, FSB 15,111 10 FIRE this quarter by Cowork|rs. Cowork|rs committed to a total 85 Broad Street Expansion of 70,000 square feet at two Lower Manhattan locations this Icahn School of Medicine 14,600 11 at Mount Sinai Education quarter, including 40,000 square feet at 60 Broad Street and Relocation 30,000 square feet at 55 Broadway. Currently, the company 225 Refinery29 12,805 has one other Manhattan location in the Flatiron neighborhood 12 TAMI 225 Broadway Expansion and a future location in the Gowanus neighborhood in Brooklyn. Gilbane Building Co. 12,707 These leases reflect the second consecutive quarter of top 13 FIRE 88 Pine Street Expansion deals among the coworking industry – last quarter, WeWork Loeb Partners Corporation 11,540 committed to 240,000 square feet in 85 Broad Street. 14 FIRE 100 Expansion Catholic Medical 11,406 15 Mission Board Nonprofit Relocation 100 Wall Street LMHQ On July 1, 2015, the Downtown Alliance opened LMHQ, a cross sector collaboration space created to foster the ongoing evolution of Lower Manhattan into a bustling tech and creative center. LMHQ opened in 12,500 square feet on the 20th floor of 150 Broadway and offers opportunities to work, take meetings, network and learn about industry trends. It features a 140-seat event space available for meet ups, hackathons and other networking opportunities. LMHQ also provides leadership events and original programming from a robust partner network that includes New York Tech Meetup, New York Technology Council, Center for an Urban Future, TheLi.st, and Uncubed Wakefield; will serve as an education partner. LMHQ offers both individual and company memberships as well as drop-in opportunities. For more information or for membership options, please visit www.lmhq.nyc.

Lower Manhattan Real Estate Year in Review | Q2 2015 2 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Rise in Employment SHARE OF LOWER MANHATTAN EMPLOYMENT In the fourth quarter of 2014, private sector payroll employment GROWTH BY SECTOR, in Lower Manhattan reached its highest level since December Q4 2013 - Q4 2014 Source: New York State Department of Labor 2001, with its fifth consecutive quarter of growth.1 The number Other of private sector employees is up by more than 2,200 since the Other 7% third quarter of 2014 and more than 13,000 year-over-year. Services 7% A collection of industries is driving this major gain, including Hotel, Retail & Professional Services, Information, Education and Social Services Restaurants 7% Education and Hospitality and Retail. Nearly 50% of all jobs added during & Social this period were in Education and Social Services, followed by +14,177 Services 21% in Information and 13% in Professional Services. Professional 41% Services ADDED JOBS 14% Several large corporate relocations over the past year, many of them in the TAMI sector, fueled rises in both Information and Professional Services employment in Lower Manhattan. In 2014, companies such as Condé Nast (which relocated to One World Information Trade Center) and HarperCollins Publishers (which moved into 24% ) drove employment gains. Future moves from other large TAMI firms will extend this trend over the next several years; these include TIME Inc.’s planned relocation to a new More than headquarters in Brookfield Place and GroupM’s relocation in 3 TAMI World Trade Center, among many others. Tenants Technology, Advertising, Media, & Information 1 Source of employment totals: New York State Department of Labor, Q4 2014 reflects most current data available

LOWER MANHATTAN PRIVATE SECTOR PAYROLL EMPLOYMENT, Q4 2001-Q4 2014 Source: New York State Department of Labor

240,000 236,745

227,051 230,000

220,000 e s y o l m p E

r 210,000 o c t e S

e t

a 200,000 v i r

P 198,878 f o

r

e 190,000 b m u N

180,000

170,000 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Lower Manhattan Real Estate Year in Review | Q2 2015 3 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Rents Lower Manhattan commercial Overall Asking Rents up LOWER MANHATTAN CLASS A AND B ASKING RENTS, rents continued their steady, Q2 2014 -Q2 2015 upward climb. In the second Source: Cushman & Wakefield quarter, overall average asking $65 rents reached a new level of 18% $62.26 from Q2 2014 $58.25 — the highest in the $60 market’s history — and are $54.08 now up 18% over this time last year, according to Cushman & $55 Wakefield. This rise in rents spans office classes. Class B rents $50 are up 17.7% year-over-year, reaching an average of $44.82. $44.82 Class A rents increased by 15.1%, reaching an average of $45 $62.26. $38.08 $40

Commercial rents have also increased in other submarkets, $35 reflecting a competitive office market and an economy with $30 record employment levels. Meanwhile, Lower Manhattan retains an advantage with competitive pricing. On average, Lower $25 Manhattan’s overall asking rents are $8.60 less than in Midtown Q2 Q3 Q4 Q1 Q2 South and $18.20 less than in Midtown, with premium Lower 2014 2015 Manhattan properties competing at an even better bargain when Class A Class B compared to asking prices at comparable properties in Midtown and Midtown South.

MANHATTAN OVERALL ASKING RENTS BY SUBMARKET Source: Cushman & Wakefield

$80

$75 $76.45 $70

$65 $66.86 $60

$55 $58.25

$50

$45

$40

$35

$30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2010 2011 2012 2013 2014 2015

Lower Manhattan Midtown South Midtown

Lower Manhattan Real Estate Year in Review | Q2 2015 4 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Vacancy While leasing activity is down, the vacancy rate held steady through the second quarter, as little additional space became available in Lower Manhattan. The vacancy rate is 10.3%, steady year-over-year and from last quarter. 100 Wall Street The Class A market in Lower Manhattan has the highest vacancy Cornerstone Real rate, 12.7%, with 6.7 million square feet available to lease. Estate Advisers Commercial Sales purchased the 29-story, 520,000-square-foot Cornerstone Real Estate Advisers has purchased 100 Wall office tower from Street, a 29-story, 520,000-square-foot office tower, from Savanna for $275 Savanna for $275 million. The deal set a new record for price per million. square foot Downtown, East of Broadway: $528. Savanna bought the building in 2011 from Lehman Brothers for $120 million and At $528 PSF, the sale has invested roughly $26 million in renovating the property. was the highest price per square foot record Among office sales closed in Q2, RXR completed its $675 million Downtown, East of purchase of from Beacon Capital Partners. GE Capital Broadway. provided $325 million in financing. Beacon Capital bought the 1.16 million-square-foot property from Paramount Group in 2007 for $751 million. RXR simultaneously sold the property’s land in a 150-year leaseback arrangement to a partnership involving David Werner.

LOWER MANHATTAN VACANCY RATES BY CLASS TYPE, Q2 2011 - Q2 2015 Source: Cushman & Wakefield

16%

14% 12.7%

11.6% 12%

9.5% 10%

9.3% 8% 7.1%

6% 6.6%

4% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2011 2012 2013 2014 2015 Class A Class B Class C

Lower Manhattan Manhattan Real Real Estate Estate Year inYear Review in Review| Q2 2015 | Q2 2015 5 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS RETAIL MARKET

Development Brookfield Place’s extensive renovation of 375,000 square feet of retail and public space was officially unveiled on March 26. Among its roster of curated retail, restaurant and lifestyle options, Brookfield features luxury fashion labels, contemporary brands, chef-inspired restaurants and gourmet food markets. Many more restaurants and shops will open throughout the next year, including a 75,000-square-foot Saks Fifth Avenue. Opening in the next year, Westfield World Trade Center will become an iconic destination with 150 stores and restaurants in Santiago Calatrava’s Oculus and at the base of both the 3 and buildings. The 365,000-square-foot complex previewed its retail and dining offerings, which include Hugo Boss, Michael Kors, Banana Republic and Desigual. Mario Batali’s Eataly Courtesy of will serve as the culinary anchor among many other food, beverage and dining options. In other Westfield news, the fit-out ofFulton Center’s 65,000 The 375,000-square-foot retail complex square feet of commercial and retail space is underway with a opened March 26, 2015. Additional stores completion date in early 2016. Shake Shack announced plans last and restaurants will open throughout the quarter to open a location on the second floor. The transportation summer and fall. hub opened in November 2014 and has improved connections between nine subway lines and five existing subway stations. More than 300,000 commuters, residents and tourists are expected to cross through the station each day. The Dey Street connector, which is the last piece of a continuous underground passageway between , the World Trade Center and Brookfield Place, is still in progress and expected by 2016. The Howard Hughes Corporation continues with construction of the revamped Pier 17 at the Seaport. The new pier and revitalized historic area will provide 365,000 square feet of retail, dining and entertainment by 2017. Nearby to Pier 17, iPic Theaters is planning to open an eight-screen movie theater in early 2016 in the Fulton Market Building. Additional components of the Seaport redevelopment plan are yet to be determined.

Over 150 stores and restaurants at 2 Million SF Westfield World Trade Center are expected of new & repositioned retail space to open in the next year.

Lower Manhattan Real Estate Market Overview| Q2 2015 6 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

New Openings and Announcements throughout District At the second quarter’s end, the district had 1,060 stores and restaurants – a 6 percent increase over last year. Lower Manhattan saw 30 new stores and restaurants open this quarter and 75 since the beginning of 2015. At Brookfield Place, luxury and contemporary brands continued to roll out after the March opening of the repositioned retail space. Salvatore Ferragamo, Burberry, Scoop NYC and Vilebrequin were added to the shopping roster. Parm welcomed guests with their favorite Italian dishes, while Beaubourg and L’Appart opened with flair in Le District, the 30,000-square-foot French Courtesy of Nick Solares for NY Eater marketplace. The Institute of Culinary Education revealed its new 74,000-square-foot facility, the largest culinary school to be built Parm, an Italian-American eatery, in America in more than 10 years. was unveiled at 250 in In the Seaport, Smorgasburg made its summer return with eight Brookfield Place. food kiosks along Fulton Street. Industry Kitchen opened along the Esplanade, featuring wood-oven pizzas, while VBar brought its Mediterranean cuisine to Front Street. The Howard Hughes Corporation, in partnership with Women’s Wear Daily, launched Seaport Studios, a retail concept space dedicated to showcasing emerging fashion designers, in the restaurant space formerly occupied by Red at 19 Fulton Street. Eateries opened district-wide: Malt House, an American tavern, at 9 Maiden lane; Neapolitan Express, the first brick and mortar location of the pizza food truck, at ; and Gunbae,

Lower Manhattan’s first Korean BBQ and karaoke spot, at 67 Courtesy of L.O.L. Kids Murray Street. Courtesy of Malt House Retail momentum also continued to build along Broadway, as Anthropologie signed a 20,000-square-foot lease in the grand Malt House, an American tavern, lobby of 195 Broadway. The retailer will join Nobu, the famed opened at 9 Maiden Lane. Japanese restaurant relocating from . Both are scheduled to open in early 2017. Lower Manhattan is attracting more and more marquee restaurant talent. April Bloomfield and Ken Friedman announced they will operate a four-level dining and drinking venue, with outdoor terraces, at the top of . The former AIG tower is being converted to 644 luxury rental apartments. Trailblazing chef Wylie Dufresne will open a hotel restaurant in the AKA Wall Street, which is currently under development at 84 William Street.

New stores and restaurants have Courtesy of Jane Kratochvil opened in the first half of 2015 Seaport Studios, a retail concept store 75 featuring emerging fashion designers, opened at 19 Fulton Street.

Lower Manhattan Real Estate Market Overview| Q2 2015 7 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Lower Manhattan emerges as a premier waterfront dining destination

If you fancy dining on the water, Lower Manhattan is the place for you. The district boasts more than 10 waterfront eateries, all offering exquisite views along with their delicious cuisine.

Pier A, which opened in late 2014, is a 28,000-square-foot bar, restaurant and event space in Battery Park overlooking the Hudson River. The first floor features a large bar and oyster bar and is surrounded by a promenade of outdoor tables. The second floor boasts a multi-room fine-dining experience with private cocktail bars. The third floor is dedicated to special events. The landmarked building is brimming with history. It was built in 1886 and has served as the headquarters of the New York Harbor Police and Department of Docks, as well as the main station for the Marine Division of the Fire Department.

Brookfield Place’s repositioning of its restaurant and retail space — with great views of the Hudson River and North Cove Marina— is a boon for Lower Manhattan’s flourishing restaurant scene. P.J. Clarke’s, a favorite watering hole, was joined by the popular Hudson Eats, a 600-seat gourmet food hall. Le District, the 30,000-square-foot French marketplace, recently unveiled the al fresco dining portion of its restaurants Beaubourg and L’Appart – providing over 7,000 square feet of outdoor dining. Later this year, L’Atelier de Joel Robuchon will provide world-class dining with spectacular views of the .

The Howard Hughes Corporation’s revamping of Pier 17 at the will provide 365,000 square feet of retail, dining and entertainment. The new space, with magnificent views of the and Lower Manhattan, will feature a one- and-a-half-acre rooftop that will include a world-class restaurant, two outdoor bars and an amphitheater that can hold up to 4,000 Photo by Pete Thompson people for concerts and special events. The project is expected to be completed in 2017.

The Battery Maritime Building, a Beaux-Arts landmarked building built in 1909, is being transformed into a 61-room boutique hotel featuring a rooftop restaurant and event space. The Dermot Company is working with the Poulakakos Family to bring a premier dining and catering business to the historic building.

“The neighborhood in the last few months has just exploded with people.”

- Kevin Richer, North End Grill Courtesy of Industry Kitchen

Lower Manhattan Real Estate Market Overview| Q2 2015 8 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

TOURISM & HOSPITALITY

Record Year for Tourism 2014 was a banner year for tourism in Lower Manhattan, as the district welcomed 12.4 million unique visitors — a 30% increase since 2013 and a 10% gain over 2012. The National September 11 Memorial Museum, which opened in May 2014, has already welcomed over 3 million visitors. Tourism is expected to continue growing throughout 2015, spurred in part by the recent opening of the 120,000-square-foot One World Observatory on May 29 (see callout). Hotel Development Takes Off There are currently 5,100 hotel rooms in 22 hotels throughout Lower Manhattan — a 25% increase in hotel rooms since 2010. Some 2,400 hotel rooms in 14 hotels are under construction, with another 1,200 hotel rooms at seven hotels in the planning stages.

This quarter, Tribeca Associates announced plans for a 26-story, Courtesy of Hidrock Realty 228-room hotel to be built at 143 Fulton Street. Cipriani-owned luxury boutique hotel Mr. C made plans to convert the 72-room Best Western Seaport at 33 Peck Slip. Fortis Property Group will build a The Aloft Manhattan Downtown, at 49 Ann 33-story, 217-room AC Hotel by Marriott at 151 Maiden Lane. Street, opens in late July. The hotel has 125 rooms. Over the course of the remainder of 2015, Lower Manhattan will see almost 700 hotel rooms open in five hotels – resulting in an 18% hotel room increase over 2014. Among the new and upcoming hotels: 12.4 MILLION • Aloft Hotel at 49 Ann Street, 125 rooms (opening late July); estimated number of visitors in 2014 • Four Points by Sheraton at 6 Platt Street, 262 rooms;

• Q&A Residential Hotel, at 70 Pine Street, 132 rooms;

• Riff Hotel at 102 Greenwich Street, 36 rooms;

• AKA Wall Street at 84 William Street, 141 rooms. Occupancy and Average Daily Room Rate Lower Manhattan hotels rebounded from a weaker first quarter, seeing a 16 percentage point increase in occupancy and a 14 percent increase in average daily room rate (ADR). In addition, New York City saw a 14 percentage point increase in occupancy and a 32 percent ADR increase from last quarter. Lower Manhattan’s average occupancy during the second quarter was 89%, down two percentage points from this time last year.

The district’s hotel occupancy rate remained on par with New York Courtesy of AKA City’s. Lower Manhattan’s second quarter ADR was $270, as was the New York City-wide ADR (down 11% from last year). The city’s AKA Wall Street opens this fall at 84 William ADR was down only 3% from last year. Street with 141 rooms. Chef Wylie Dufresne announced the opening of a new restaurant in Source of citywide hotel figures: NYC & Company the hotel. Source of tourism estimates: Audience Research & Analysis

Lower Manhattan Real Estate Market Overview| Q2 2015 9 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

LOWER MANHATTAN HOTEL DEVELOPMENT PIPELINE Source: Downtown Alliance

Source: Downtown Alliance Owner/ Rooms/ Open Owner/ Rooms/ Open Hotel & Address Hotel & Address Developer Floors Date Developer Floors Date Aloft Hotel 107 W. Broadway Hilton Garden Inn McSam Hotel 1 49 Ann Street Realty Corp 125/18 2015 12 6 Water Street Group 249/29 2016 120/40 2 Four Points by Sheraton Lam Group 262/30 2015 13 Residence Inn Lam Group (upper 2017 6 Platt Street 215 floors) Q&A Hotel 200/40 3 Rose Associates 132/ 2015 14 Courtyard by Marriott Lam Group (lower 2017 70 Pine Street 4(of 66) 215 Pearl Street floors) Riff Hotel Royal United Hotel Indigo 10-12 MLane 4 102 Greenwich Street Builders 36/5 2015 15 10-12 Maiden Lane Inc. 190/25 2017

AKA Wall Street Prodigy AC Hotel | Marriott Fortis Property 5 84 William Street Networks 141/19 2016 16 151 Maiden Lane Group 271/33 2017

The Beekman Hotel GB Lodging TBD Hotel Premier Emerald 6 Group 287/9 2016 17 11-13 LLC 143/27 2018

Courtyard by Marriott Extended Stay Hotel Prodigy 7 133 Greenwich St Hidrock Realty 317/31 2016 18 17 John Street Networks 194/23 2018

Boutique hotel The Dermot TBD Hotel 8 Battery Maritime Building Group 61/5 2016 19 Street Lighstone Group TBD/12 2018

The Artezen Hotel Westbury Realty TBD Hotel Fit Investment 9 24-26 John Street Associates 89/21 2016 20 50 Trinity Place Group 188/29 TBD

TBD hotel Jiten Hotel TBD Hotel NY Times 10 100 Greenwich Street Management 192/25 2016 21 Square Hotel 150/31 TBD 120-122 Water Street Group

11 Four Seasons Silverstein 189/ 2016 TBD Hotel Tribeca 30 Park Place Properties 21 (of 82) 22 143 Fulton Street Associates 228/26 TBD

One World Observatory Opens

Named one of the “world’s hottest new travel experiences” by Lonely Planet, the 120,000-square-foot One World Observatory opened to the public on May 29th. Operated by Legends Hospitality, the observatory offers iconic views from the 100-102nd floors of the 1,776-foot-tall One World Trade Center. At the base, guests learn about the personal stories of those who built One World Trade Center. Five dedicated elevators bring visitors to the 102nd floor in 60 seconds, featuring a virtual time-lapse of the development of the New York City skyline. At the top, the See Forever Theater and City Pulse present imagery of the city, neighborhoods and landmarks. Ticketed guests are also able to visit three distinct dining options from casual café fare to seated fine dining. Since its opening, the Observatory has welcomed hundreds of thousands of guests. It projects 3 million annual visitors.

Courtesy of One World Obsevatory

Lower Manhattan Real Estate Market Overview| Q2 2015 10 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

RESIDENTIAL MARKET

Inventory and Development Lower Manhattan boats nearly 31,000 residential units in 323 buildings with an estimated population of approximately 60,000 residents. The number of housing units continues to expand as construction moves ahead on over 3,500 residential units in 18 properties, while another 2,000 units in 13 properties are in the planning stages. Among the projects under construction and in development, 44% of the units will be rental and 41% will be condominiums. In 2015, 927 units will come onto the market, 865 of which are rental units at 70 Pine Street and . At 70 Pine Street, plans include opening the rental gallery for the 644 rental units in October, in anticipation of a late 2015 debut. DTH Capital is wrapping up phase II of the conversion of 20 Exchange Place, adding 221 additional luxury rental units to the existing 556 rental units it completed in 2008.

This quarter, plans were announced for: 2 Rector Street •Six buildings along West Broadway between Warren and Kushner Companies and CIM Group plan Murray Streets, collectively known as 71 West Broadway. to convert the 26-story office building at The buildings were purchased by Cape Advisors for $50 2 Rector Street into a 452-unit apartment million, or $1,000 per square foot. The developer plans to building. construct a 46,000-square-foot condo building at the site.

•Kushner Companies and CIM Group’s conversion of 2 Rector Street into 452 apartments. The 470,000-square-foot office building was purchased two years ago for $140 million.

•The Moinian Group’s construction of a 29-story, mixed-use residential building at 102 John Street. The existing five-story building will get a vertical enlargement. The development will have 92 residential units, 59,000 square feet of commercial space and a new 44-car parking garage.

More than Image via Google Maps 71 West Broadway Cape Advisors bought six buildings along 60,000 West Broadway for $50 million and plans residents to construct a 46,000-square-foot condo building at the site.

Lower Manhattan Real Estate Market Overview| Q2 2015 11 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

HIGHLIGHTS OF LOWER MANHATTAN RESIDENTIAL Strong Sales and Rental Market DEVELOPMENT The Lower Manhattan sales market slowed throughout the first Source: Downtown Alliance half of 2015, with the total number of sales down by 47% over a Address & Lease & Units Open Date Building Name Building Type year ago. While sales totals decreased, the median sales price in Rental Buildings Under Construction Lower Manhattan rose 5% year over year. Meanwhile, Manhattan- wide sales activity saw a 20 percent decrease year over year and 70 Pine Street Rental 1 Conversion 644 2015 a median sales price increase of 8 percent. 20 Exchange Place Rental Lower Manhattan’s average sales price per square foot remained 2 Phase II Conversion 221 2015 flat at $1,300 but experienced a year-over-year increase of 4%. 60 Fulton Street Rental 3 Exhibit New Construction 120 2016 The Manhattan average price per square foot rose over last

110 Wall Street Rental quarter by 6% and also saw a 6% increase from last year. 4 WeWork/WeLive Conversion 232 2016 Meanwhile, the Lower Manhattan rental market also experienced 5 180 Water Street Rental 565 2017 Conversion a rise in pricing year over year, with the median rent rising 2.5% Condo Buildings Under Construction to $3,639. The Manhattan median rent trended similarly, rising 2.8% year over year to $3,374. 19 Park Place Condo 1 New Construction 21 2015 Source of rental and sales market data: Miller Samuel/Douglas Elliman 87 Chambers Street 2 Condo 17 2015 Reade Chambers New Construction AVERAGE SALES PRICE ($) PER SF Source: Miller Samuel/Douglas Elliman 12 Warren Street Condo 3 New Construction 24 2015 $1,400 5 Beekman Street Condo 4 68 2016 $1,340 The Beekman Residences New Construction $1,350 30 Park Place 5 Condo 157 2016 $1,300 Four Seasons Residences New Construction $1,317 $1,250 50 West Street Condo 6 New Construction 191 2016 $1,200 Condo 101 Wall Street $1,150 7 Conversion 52 2016 $1,103 100 Barclay Street Condo $1,100 8 Ralph Walker Tribeca Conversion 161 2016 $1,050 $1,036 233 Broadway Condo 9 Woolworth Residences Conversion 34 2016 $1,000

151 Maiden Lane TBD $950 10 One Seaport New Construction 80 2017 $900 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 11 111 Murray Street Condo 154 2018 New Construction 2013 2014 2015 Lower Manhattan Manhattan 112-118 Fulton Street Condo 12 New Construction 460 2018

Condo Buildings Planned for Development LOWER MANHATTAN RESIDENTIAL UNITS UNDER CONSTRUCTION & IN DEVELOPMENT 1 68-74 Trinity Place Condo 111 2017 Source: Downtown Alliance New Construction 5,500 Unit Pipeline: Rental/Condo Units Condo • 3,500 Under Construction 2 New Construction 300 2018 4% TBD • 2,000 In Development TBD 11% 3 Conversion TBD 2018

130 William Street Condo 4 New Construction 188 2018

5 71 West Broadway Condo 35 TBD New Construction Residential Units Condo Units Under Construction 41% 6 2 Rector Street TBD 452 TBD Conversion & In Development

102 John Street TBD 7 New Construction 92 TBD Rental Units 44%

Lower Manhattan Real Estate Market Overview| Q2 2015 12 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

CAPITAL IMPROVEMENT PROGRESS

World Trade Center (WTC) 4 World Trade Center One World The 72-story, 2.3 million-square-foot office tower was completed in Trade Center November 2013. The building is 62% leased to the Port Authority, the City of New York, MediaMath, IEX and Morningstar. Silver Suites, a The tallest building in short-term office provider, signed a 47,000 square-foot lease at the the western hemisphere beginning of the second quarter, along with PadillaCRT, the first public opened in 2014. relations firm to move to the new World Trade Center. The 104-story, 3 million- square-foot tower is One World Trade Center currently 64% leased. The 104-story, 3 million-square-foot office tower opened on November 3, 2014. Condé Nast is now fully installed in the Condé Nast has fully building and occupies 1.2 million square feet. occupied its 1.2 million- square-foot lease. Other One World Trade Center is currently 63% leased, with other tenants: High Five tenants including Beijing Vantone China Center, the U.S. General Games, xAd, & KiDS Services Administration, Servcorp, KiDs Creative, High Five Creative. Games, xAd, Incandescent Technologies, Cushman & Wakefield, BMB Group, Westfield and Legends Hospitality Group. TAMI-sector Legends Hospitality firms now comprise nearly half of the building’s leaseholders. opened One World Moody’s is expected to sign an 80,000-square-foot expansion Observatory on May 29. from 7 World Trade Center in the third quarter. Courtesy of Silverstein Properties One World Observatory, Legends Hospitality’s 120,000-square- foot observation facility on floors 100, 101 and 102, opened May 29th; over three million visitors are expected annually. Two World Trade Center Three World Trade Center Anticipated to open The 2.5 million-square-foot office tower is tentatively scheduled to 2021. top out in December 2016 and to be completed in 2018. Group M Worldwide finalized a lease for 515,000 square feet in the fourth Bjarke Ingels quarter of 2014. Group replaced Norman Foster as the architect of the Two World Trade Center 88-story, 2.8 million- 21st Century Fox and News Corp signed a letter of intent with Silverstein Properties to anchor 1.3 million square feet, or about square-foot office 46%, of the tower. This would mean that both firms would relocate tower. from . 21st Century Fox and The redesign of the 88-story, 2.8 million-square-foot office tower News Corp signed a was announced this quarter with Bjarke Ingels Group (BIG) letter of intent with replacing Norman Foster as the tower’s architect. The planned Silverstein Properties tower will incorporate studios and newsrooms rather than trading to anchor 1.3 million floors (the original tower was designed with financial tenants in square feet, or about mind). 46%, of the tower. Courtesy of DBOX for Silverstein Properties

Lower Manhattan Real Estate Market Overview| Q2 2015 13 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

National September 11 Memorial Museum Transportation Infrastructure The 100,000-square-foot National September 11 Memorial Fulton Center Museum officially opened a year ago, on May 21, 2014, and has Fulton Center officially opened in November3 World 2014. The Trade 65,000-square- since welcomed over 3 million visitors. The National September 11 foot commercial space at Fulton Center isCenter fully leased, and tenants are Memorial, which opened in September 2011, has drawn more than expected to include beauty salons, drugstores and grab-n-go eateries. 20 million visitors. With financing in The retail portion is expected to open in place,early 2016. the building The Dey Street connector, which is theis last scheduled piece of a continuous to be The World Trade Center Transportation Hub underground passageway between Fultoncompleted Center, the in World 2018. Trade The 800,000-square-foot space will house the PATH station and Center and Brookfield Place, is still in progress and expected to open Westfield’s 350,000-square-foot retail complex and connect to by 2016. GroupM signed a Fulton Center on the east and Brookfield Place on the west. In lease for 515,000 advance of the opening of the World Trade Center Transportation South Ferry station square feet in the 2.5 Hub, the temporary PATH station deconstruction is scheduled to The MTA awarded a $194 million contractmillion-square-foot to rebuild the South Ferry begin in the third quarter of 2015; and new entrances and exits will subway station that was damaged in Hurricaneoffice Sandy. tower. The station will be relocated to WTC Towers 2 and 4. get permanent flood protection measures, will become wheelchair Platform B opened in early May, connecting the World Trade accessible and will allow entry and exit for all ten cars along the No. 1 Center PATH station to the Newark-bound line. Pedestrian traffic line. Completion is expected in 2017. was officially opened at the intersection of Greenwich and Fulton Streets, connecting Vesey Street and the current PATH station to the Broadway Reconstruction memorial plaza. The Department of Design and Construction (DDC) launched a $42 million capital reconstruction project on Broadway, referred to as Pier 17 Redevelopment Broadway 1, stretching from Ann Street to Rector Street. This project will The Howard Hughes Corporation completed the deconstruction of replace all underground infrastructure, including water mains, sewers, Pier 17; pier replacement and superstructure will continue through electric, gas and other utilities, as well as construct new streets and 2015. Plans include 365,000 square feet of retail, dining, and curbs. Crews will focus on two blocks at a time, moving northward on the entertainment space, as well as a new food market in the Pier 17 west side, then southward on the east side. The full project is scheduled building. to be finished in 2017.

The Battery Phase I of the Battery Bikeway opened with expanded pedestrian sidewalks and seating. Phase II, continuing through the summer, will connect Manhattan’s east and west bike paths. The SeaGlass Carousel and the surrounding Woodland Gardens will open on August 20th. The Battery Oval, a three-acre lawn, will reopen to the public later this summer. The space has an audience capacity of 5,000 people. In the fall, the Oval will be populated by 300 chairs chosen in a design competition. Designs are now being finalized for an expanded new playground of 1.4 acres, which is scheduled to open in 2017. The 800,000-square-foot facility will house the PATH station and Westfield’s 350,000- In March 2015, the Mayor’s Office announced that $8 million would Courtesy of Sara Cedar Miller for the Battery Park Conservancy square-foot retail complex, as well as offering go to flood protection design and the first phase of implementation The Battery at Battery Park. Another $6.75 million was put toward advanced underground connections to Fulton Center planning and environmental review for comprehensive flood The SeaGlassand Brookfield Carousel Place.and the surrounding protection from the Manhattan Bridge along the tip of Lower WoodlandCompletion Gardens is will scheduled open on forAugust late 2015.20th. The Manhattan until the north end of Battery Park City. In total, the city Battery Oval, a three-acre lawn, will reopen to the and state have devoted $14 million to plan and build resiliency public later this summer. infrastructure in Lower Manhattan.

Lower Manhattan Real Estate Market Overview| Q2 2015 14 Visit www.downtownny.com/research 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:

TAMI Takes Lower Manhattan, a report on the growth of technology, advertising, media, and information companies moving south of Chambers Street;

Everything Old is New Again: Conversions of Historic Properties in Lower Manhattan, a report on historic properties preserved through significant investment and changs in use;

The Golden Age of Transit in Lower Manhattan, a report released on Fulton Center’s opening, describing the more than $6.4 billion of transit investments since 2005 and how these investments benefit a large, and growing labor force;

Going to the Head of the Class: The Growth of Higher Education in Lower Manhattan, a report on the growth of higher education in Lower Manhattan;

A Surge of Bits and Bytes: The State of Tech and Innovation in Lower Manhattan, a report on Lower

Manhattan’s growing technology industry;

The Brain Gain, a report on how the region’s shifting demographics are favoring the Lower Manhattan business district;

If you have questions or require additional information,

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