sign in sign up
<<
Home , 120 Wall Street, 125 Greenwich Street, 161 Maiden Lane, 200 Vesey Street, 23 Wall Street, 28 Liberty Street

ALLIANCE FOR DOWNTOWN LOWER REAL ESTATE YEAR IN REVIEW 2016

Photo by Mark Weinberg, for Utopia, The Agency OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

ALLIANCE FOR DOWNTOWN NEW YORK REAL ESTATE YEAR IN REVIEW 2016

LOWER MANHATTAN CATCHES ITS BREATH

In 2016, Lower Manhattan continued its decade-long existing Lower Manhattan tenants seizing opportunities to transformation into one of New York’s most vibrant, stay or expand in the neighborhood. In addition, current 24/7 neighborhoods. While commercial leasing mirrored and new media, tech and advertising tenants grew their the slowdown experienced throughout Manhattan, several presence but at a slower rate than past years. Droga5, existing Lower Manhattan tenants demonstrated their a Lower Manhattan TAMI tenant since 2014, expanded commitment to the district by renewing or expanding their by more than 100,000 square feet in early 2016. Other Lower Manhattan footprints. Additionally, a pipeline of smaller TAMI deals followed throughout the year, and late upcoming deals announced in 2016 will (if completed) take November brought exciting news reports about Spotify’s several large blocks of space off the market. As commercial rumored move to a new headquarters in 4 World Trade leasing took a breather, Lower Manhattan’s dining and Center. Lower Manhattan also began to reap the benefits retail scenes took off. Internationally renowned chefs opened of prior strong years as new tenants in growing industries some of 2016’s most anticipated new restaurants in Lower completed their moves to the district. These changes Manhattan, while Westfield World Trade Center brought world- continued to diversify the tenant mix and helped drive class retail to the stunning World Trade Center Transportation private sector employment to its highest level since the Hub. The market has remained robust with several end of 2001. major openings, and residential developers continue to invest in Lower Manhattan. The World Trade Center also reached another milestone with the opening of Westfield World Trade Center in 2016 Commercial leasing was relatively quiet in 2016, reflecting and its more than 100 new shops and eateries. Lower the economic and political uncertainty that dampened leasing Manhattan also welcomed nearly 80 dining establishments activity throughout Manhattan. This year’s overall activity did this year, from fast casual concepts to full-service confirm that existing Lower Manhattan tenants continue to neighborhood spots to destination restaurants by renowned see both value and quality in a Lower Manhattan address. chefs across the district. The neighborhood now boasts Activity at the World Trade Center especially illustrated this 512 total restaurants and casual eateries with the majority trend; One and inked a combined open after dark. All of these changes led to Bloomberg 320,000 square feet of leases, many of which came from News declaring, “Manhattan’s FiDi is this year’s surprise, hot restaurant scene”.

Lower Manhattan Real Estate Year in Review | 2016 1 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

ALLIANCE FOR DOWNTOWN NEW YORK LOWER MANHATTAN REAL ESTATE YEAR IN REVIEW 2016

2016’s culinary contributions extend also to new places to through the World Trade Center complex, and shop with the neighborhood’s expansion of food markets opened atop the Vehicle Security Center (creating an above and grocery stores. In 2016, Eataly opened in 4 World ground connection via the Liberty Street pedestrian bridge Trade Center, joining Le District at Brookfield Place, and in across West Street to Brookfield Place). Public space 2017, Acres Market, Dean & Deluca and a World Trade reopened in and around the World Trade Center, reconnecting Center greenmarket will join this array. In mid-2016, Whole the now active to the rest of the neighborhood. Most Foods also announced that it would open a 44,000-square- symbolic of this change was the deconstruction of the foot store in 2018 at the base of One , further temporary PATH station, where The Ronald O. Perelman expanding options for Lower Manhattan’s robust daytime Center for Performing Arts is slated to be built. population and residents.

Lower Manhattan’s hotel offerings also expanded and diversified in 2016 as the market welcomed the eagerly anticipated Four Seasons New York Downtown, featuring CUT by Wolfgang Puck, and The Beekman, featuring restaurants by Keith McNally and Tom Colicchio. More mid-priced options such as The Four Points by Sheraton New York Downtown and The Courtyard by Marriott World Trade Center, also opened. The range of flags and price points opening south of Chambers is broadening this area’s appeal to luxury, leisure and business travelers alike. In total, Lower Manhattan’s hotel market has now reached 6,560 rooms, a 35 percent expansion in hotel room inventory from just two years ago.

With all of these developments, Lower Manhattan has more to offer its population of 61,000 residents than ever before. More than 1,200 residential units were completed in 2016, including premier luxury condominium projects like 30 Park Place, 100 Barclay and 5 Beekman. Lower Manhattan’s residential market goes beyond luxury buyers; more than 43 percent of the district’s population are millennials. More than 1,500 units, the majority of them rental, are expected to come online in 2017 and will provide more housing options for young New Yorkers looking to live in Lower Manhattan.

Not only are there more choices of where to eat, visit, live or shop, but it is now much easier to get around Lower Manhattan—especially around the World Trade Center complex. Most noticeably, the World Trade Center Transportation Hub opened in early March 2016, providing Pete Thompson for Utopia, The Agency access to the NJ PATH as well as a virtual river-to-river underground linkage from Brookfield Place to One and 4 World Trade Center and through to . In addition, reopened to pedestrians passing

2 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

COMMERCIAL OFFICE MARKET

LOWER MANHATTAN MIRRORS CITYWIDE LEASING SLOWDOWN

After several years of intense leasing activity reshaped the significant deals announced throughout 2016 that are expected makeup of the district as new tenants took occupancy, Lower to close in early 2017 and bolster upcoming leasing totals. In Manhattan’s commercial market took a breath in 2016. Major late January 2017, the New York State Attorney General’s new leasing announcements waned, and several 100,000- closed a deal to relocate to 345,000 square feet in 28 Liberty, plus square foot deals are pending. Both Lower Manhattan opening up a 428,000-square-foot block in 120 . In and Manhattan as a whole experienced a slower commercial addition, there is a rumored pending deal with the New York market in 2016 due in part to political and economic uncertainty. City Department of Investigation at 180 for While leasing totals were weaker than usual overall, the market about 300,000 square feet. 1 Liberty Plaza is also expected to nonetheless posted some solid commitments from existing finalize two deals for a combined 300,000 square feet;Aon , an tenants and charted the largest deal of the year citywide, with insurance firm, has a pending lease to move to 200,000 square McGraw Hill’s 900,000-square-foot renewal at feet from 199 Water Street, and New Avon plans to relocate to in March 2016. 90,000 square feet from the company’s Midtown Headquarters. Finally, Spotify, currently located in the Flatiron district, is close Lower Manhattan logged 3.36 million square feet of new leasing to a 400,000-square-foot commitment at 4 World Trade Center, activity in 2016, according to CBRE, after capping the year according to news reports. Spotify’s deal would make 4 World with 483,000 square feet leased in the fourth quarter. This Trade Center fully leased. year-end total reflects a 27 percent drop from 2015 and is 33 percent below the five-year average. However, there were several

LEASING ACTIVITY BY MANHATTAN SUBMARKET, 2012 - 2016 Source: CBRE YTD Leasing, 2012

20 Million

18 Million

16 Million 15.1 MSF 14 Million

12 Million

10 Million

Square Feet 8 Million 2 Rector Street

6 Million 4.4 MSF 4 Million 3.36 MSF

2 Million

0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Lower Manhattan Midtown Midtown South

Lower Manhattan Real Estate Year in Review | 2016 3 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

LOWER MANHATTAN TOP LEASES, 2016 Overall, Manhattan activity was dampened throughout 2016 as Source: Downtown Alliance, CBRE, JLL, CoStar, Colliers International new leasing activity also decelerated in Midtown and Midtown Tenant Name SF Leased South. Midtown South activity slowed by 22 percent year- Sector Location Transaction Type over-year, with activity 14 percent below the five-year average. McGraw Hill Financial 900,027 Midtown recorded a less dramatic decline with activity down 1 FIRE 55 Water Street Renewal 15 percent from last year and just 3 percent under the five-year New York State Department 256,616 historical average. Manhattan’s leasing activity totaled 20.9 2 of Health Government Renewal million square feet at the end of 2016, making it the least active 90 Church Street 182,750 year since 2012. Expansion & NYC Department of Finance 3 Relocation from Government 375 Brooklyn offices TOP DEALS SIGNED BY EXISTING FIRE AND to LM GOVERNMENT TENANTS Zurich American 131,856 4 Insurance Company Moving Within FIRE Despite below average leasing performance, Lower Manhattan’s 4 World Trade Center LM office market still benefitted from a year of strong commitments 118,377 QBE North America 5 Moving Within FIRE from existing tenants renewing, expanding or moving within the 55 Water Street LM & Expansion district — especially to office space in the World Trade Center or Droga5 106,000 TAMI, 6 other newly repositioned buildings on the market. This trend was Advertising Expansion especially evident among Lower Manhattan’s traditionally strong Company 74,439 7 FIRE FIRE and Government industry sectors, demonstrating their 200 Renewal continued confidence in the value of a Lower Manhattan address 69,000 Trading as the neighborhood evolves. 8 Moving Within FIRE 4 World Trade Center LM & Expansion Port Authority of New York 57,245 Lower Manhattan’s top 20 deals of 2016 were emblematic of 9 and New Jersey Moving Within Government 80 Pine Street LM these trends. The majority of Lower Manhattan’s largest deals Paradigm Talent Agency 50,604 (13 out of 20) reflected activity from existing tenants, with four of 10 Other, Arts Relocation these being renewals: True Entertainment 49,320 11 TAMI, Media ●● McGraw Hill Financial, Inc.’s 900,027-square-foot 180 Maiden Lane Relocation renewal at 55 Water Street was Manhattan’s largest deal Guggenheim Foundation 45,558 12 Nonprofit overall in 2016. The financial information and analytics 1 Liberty Plaza Relocation company vacated 413,000 square feet in its namesake Global Atlantic Financial 44,711 13 Company FIRE Midtown building, 1221 , and moved into Expansion Wedding / event start up callout 4 World Trade Center Standard & Poor’s space in 2015. McGraw Hill has also ABM Industries 44,025 Other, Building been consolidating from 2 Penn Plaza where it once had 14 1 Liberty Plaza Relocation Services approximately 500,000 square feet but now holds about 41,986 85,000 square feet. It will occupy that property until 2020, Hawkins Delafield & Wood Professional 15 Moving Within LM and Services, Legal when the company will fully relocate all operations to Downsizing 55 Water Street. This deal brought Manhattan’s largest Abrams Books 41,982 16 TAMI, Media commercial building to about 97 percent leased. Relocation

Rocket Fuel 41,982 TAMI, ●● The New York State Department of Health signed a 17 195 Broadway Relocation Marketing renewal for 256,000 square feet in 90 Church Street, a The Port Authority of New 1.15 million square-foot building owned by the 41,516 18 York & New Jersey Government Renewal Postal Service. 115 Broadway Weill Cornell 40,274 ●● American Express, one of Lower Manhattan’s long-term and 19 Medical College Healthcare Expansion largest tenants, signed a 74,439-square-foot renewal at 200 156 William Street Professional Vesey Street at Brookfield Place. They currently occupy 1.35 Select Office Suites 40,000 20 Services, 90 New LM Location million square feet in Lower Manhattan. Other ●● The Port Authority renewed at 115 Broadway for 41,516 square feet.

Lower Manhattan Real Estate Year in Review | 2016 4 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Other top deals came from tenants in the FIRE and Government 170,000 square feet at 1 Liberty Plaza to 131,856 square sectors moving within the district or expanding, accounting feet on three floors in 4 World Trade Center. for 40 percent of all new activity (26 percent and 14 percent respectively). Of the top 20 deals, five existing tenants ●● Hudson River Trading, a financial technology firm, completed deals that expanded their combined footprint in committed to 69,000 square feet on the 57th and 58th the district by over 381,000 square feet, demonstrating a floors and will be moving and expanding their operations strong commitment to the market. The largest of these deals from a 60,924-square-foot space in . was completed by the Department of Finance, which leased 182,750 square feet in . The city agency will be moving some executive level offices and relocating ●● Validus Group, a Bermuda-based insurance firm, completed Brooklyn operations to the 1.1 million-square-foot property. The a 24,489-square-foot lease to move operations from 48 Department of Finance currently has a 400,000-square-foot Wall Street to the 47th floor, more than doubling its Lower lease at 66 John Street, not set to expire until 2024. In addition, Manhattan footprint. QBE North America, an insurance company, inked the 6th largest deal of the year in Lower Manhattan and will be moving ●● Global Atlantic Financial Company executed a lease for and expanding within the district from a 99,379-square-foot its second Lower Manhattan office in 44,711 square feet space in 88 Pine Street to 118,377 square feet in 55 Water on the 15th floor (which is an expansion of its current Street. 20,326-square-foot office in 7 World Trade Center).

EXISTING LOWER MANHATTAN TENANTS EXPAND also gained a tenant from 7 World Trade AND RELOCATE TO THE WORLD TRADE CENTER Center: will be relocating its offices to 37,704 square feet on the 78th floor in the second quarter of The World Trade Center benefitted from Lower Manhattan 2017 following a lease completed in June 2016. (See Below) tenants looking for new or expansion space south of Chambers Street this year. 4 World Trade Center executed over 270,000 square feet of leases in 2016 with four tenants, which brought the building to 80 percent leased. These tenants include: “We’re thrilled to stay downtown in one of the most exciting, vibrant and ●● Zurich America Insurance Company, a Switzerland- accessible neighborhoods in the world.” based insurance firm, signed the 4th largest deal of the -Ed Lopes, EVP, Zurich America Insurance Company year, committing to move its New York headquarters from

WORLD TRADE CENTER LEASING STATUS Source: , Durst Organization and CoStar % Leased With % Leased 2016 Deals SF Transaction Type Pending Deals Ameriprise Financial 37,704 Moving Within LM Easy Soft Inc 5,262 Relocation from New Jersey Global Risk Advisors 6,955 Relocation from Midtown Infosys Technologies 13,715 Expansion from Midtown 1 World Trade Center 70% N/A ITT Data 4,574 Expansion Kensho Technologies 4,020 First NYC Location Mic Network 36,099 Relocation from Midtown South Progenics Pharmaceuticals 26,558 Relocation from Westchester Co.

Zurich American Insurance Company 131,856 Moving Within LM Hudson River Trading Company 69,000 Moving Within LM 4 World Trade Center 80% 100% Global Atlantic Financial Company 44,711 Expansion Within LM Validus Group 24,489 Moving & Expanding Within LM Spotify 400,000 Pending According to News Reports

None; Group M signed an expansion for 170,000 SF in late 2015. 37% N/A Total footprint will be about 689,000 SF.

Lower Manhattan Real Estate Year in Review | 2016 5 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

NEW LEASING ACTIVITY BY INDUSTRY IN LOWER MANHATTAN, 2015 vs. 2016* Source: Jones Lang LaSalle

Apparel & Retail Trade Other Services Apparel & Retail Trade 6% 2% 2% Other Services Professional 3% FIRE Services FIRE 19% 18% 26%

Education, 2015 Health Care 2016 New Leasing & Nonprofit New Leasing Activity by 9% Activity by Industry Government Industry 5% TAMI Professional 19% Education, Services Health Care & 32% TAMI Nonprofit Government 19% 26% 14% * By square footage

LOWER MANHATTAN LEASING ACTIVITY BY QUARTER Source: CBRE

8 Million

7 Million 1.69 MSF 6 Million Q4 1.06 MSF Q4 1.71 MSF 5 Million Q4 1.23 MSF 1.21 MSF 4 Million Q4 Q4

3 Million 483 K Q4

2 Million

1 Million

0 2011 2012 2013 2014 2015 2016 Q2 Q3 Q4

Lower Manhattan Real Estate Year in Review | 2016 6 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

TAMI & CREATIVE INDUSTRIES CONTINUE TO EXPAND PRESENCE Lower Manhattan’s office market continued to diversify in LOWER MANHATTAN TOP RELOCATIONS, 2016 2016 with some notable Technology, Advertising, Media and Source: Downtown Alliance, CBRE, JLL, CoStar, Colliers International Information (TAMI) tenants and other like-minded creative SF Leased Tenant Name Previous Sector industries committing to move south of Chambers Street. TAMI’s Location Submarket share of new leasing activity fell somewhat to 19 percent from Paradigm, Talent Agency 50,604 1 Other, Arts previous highs (26 percent in 2015 and a 31 percent share in 140 Broadway Midtown South 2014, according to Jones Lang LaSalle), mirroring the slowdown Guggenheim Foundation 45,558 2 Nonprofit in relocation activity overall. But tenants in these sectors 1 Liberty Plaza Midtown South continue to view Lower Manhattan as a strong location to build ABM Industries 44,025 Other, Building 3 their creative businesses and access their clients and partners. 1 Liberty Plaza Midtown Services One of Lower Manhattan’s largest TAMI tenants, Droga5, an Rocket Fuel 41,982 TAMI, advertising firm, signed a significant expansion for another 4 195 Broadway Midtown Marketing 106,000 square feet in 120 Wall Street this year, bringing its Abrams Publishing 41,982 Lower Manhattan footprint up to 203,335 square feet. Named 5 TAMI, Media 195 Broadway Midtown South “Agency of the Year” by Advertising Age in 2016, Droga5 has now True Entertainment 40,000 doubled its original 2014 footprint. 6 TAMI, Media 180 Maiden Lane Midtown South The Quad 36,756 Paradigm Talent Agency, a talent agency for film, music, and 7 Preparatory School Nonprofit Midtown South book publishing clients, signed the largest relocation deal 40 Wall St Mic 36,099 of the year and has moved to a 50,600-square-foot office in 8 TAMI, Media 1 World Trade Center Midtown South 140 Broadway from a previous Flatiron district location. The Fitapelli and Schaffer LLP 28,329 Professional Solomon R. Guggenheim Foundation, a nonprofit focused on 9 Midtown South Services, Law the collection and preservation of art for public benefit, will be Allied Advertising 28,098 TAMI, Public expanding and moving from Hudson Square in Midtown South 10 Public Relations Midtown Relations into 45,558 square feet at Brookfield’s 1 Liberty Plaza. Another 233 Broadway three of the top 20 deals were completed by TAMI tenants Radio One 26,810 11 TAMI, Media relocating from other markets. Among these future new TAMI 4 New York Plaza Midtown tenants: Progenics Pharmaceuticals 26,558 TAMI, 12 1 World Trade Center Outside NYC Technology ●● True Entertainment and its sister firm,Original Media, TV Brennan Center for Justice production companies, will relocate to 40,000 square feet in 25,476 13 at NYU School of Law Nonprofit Midtown South 180 Maiden Lane. They are currently located in three offices 120 Broadway in Midtown South. Public Health Solutions 18,550 14 Nonprofit 22 Cortlandt Street Midtown South

Tommy John 17,460 ●● Abrams Books, a children’s book publisher, signed a lease 15 Other, Fashion 100 Broadway Midtown South for the full 42,000-square-foot, ninth floor at 195 Broadway, Bottega Veneta 16,889 joining another publisher, HarperCollins, in the building. 16 Other, Fashion 33 Midtown Demos: A Network For 16,500 17 Ideas And Action Nonprofit ●● RocketFuel, an advertising technology company, will also Midtown South 80 Broad Street relocate to a 43,000-square-foot floor at 195 Broadway, National Institute for 14,830 leaving a 90,000-square-foot office in the Penn Station 18 Reproductive Health Healthcare Midtown South submarket. With these deals, 195 Broadway is about 69 ABT SRBI 13,607 TAMI, percent leased to TAMI tenants, reflecting its appeal with 19 180 Maiden Lane Midtown South Marketing that industry. Professional Argyle Executive Forum 13,130 20 Services, 50 Broad Street Midtown South While 2016 lacked some of the blockbuster relocation Other announcements of years past, the TAMI industry accounted for eight of the top 20 relocations overall. These ranged in size from 13,600 square feet to 42,000 square feet.

Lower Manhattan Real Estate Year in Review | 2016 7 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

COWORKING– INCREASING FOOTPRINT AND DIVERSITY IN LOWER MANHATTAN

The Coworking industry now occupies more than 1 million square COWORKING FOOTPRINT IN LOWER MANHATTAN feet in Lower Manhattan, across 11 different locations and six Source: Downtown Alliance, CBRE, CoStar different providers. The footprint of this industry has tripled since the first WeWork opened in 2013 in two locations. WeWork 1.2 Million has been one of Lower Manhattan’s top 20 largest tenants for 1 Million SF the second year in a row; it occupies over 854,307 square feet 1 Million across five separate locations. WeWork is the 11th largest tenant Manhattan-wide with a total footprint of 2.12 million square feet. 866K SF 800,000 The scale and diversity of the coworking market in Lower Manhattan leaped ahead in 2016. Three new providers entered 600,000 the market. Among them: 400,000 ●● The Yard, which focuses on private offices supplemented by 249K SF 263K SF communal space, opened its 34,000-square-foot, seventh 200,000 NYC location across three floors in 116 Nassau Street in

October 2016. - 2013 2014 2015 2016 ●● Grind, a coworking space with three other NYC locations, opened its 10,000-square-foot hub in partnership with Verizon in 140 West Street.

●● Primary, a coworking space focused on fitness and Wedding and Event Startups in Lower Manhattan wellness, opened in May 2016 at . Other existing Lower Manhattan coworking companies focused on specializing and rebranding in a competitive marketplace.

●● Coworkrs, with two Lower Manhattan locations at 55 Broadway and 60 Broad Street, rebranded to The Bond Collective and will be concentrating on offering a premium, Zola Inc., a wedding and gift registry startup, hospitality-driven workspace to its members. signed a 12,500-square-foot lease at 150 ●● WeWork signed a deal with Microsoft for 300 Broadway in December 2016 and will be moving memberships for Microsoft’s sales teams, spread across in during March 2017. This wedding website WeWork at 25 Broadway and WeWork’s joins two other Lower Manhattan TAMI com- Chelsea coworking space on 18th Street. panies within a similar niche: Paperless Post and XO Group, both also located on Broadway. Paperless Post, an online card and event invita- In addition, WeWork expanded its commitment to Lower tion company, now occupies 36,000 square Manhattan in 2016. feet in 115 Broadway, after expanding in 2015. Paperless Post also offers physical cards and ●● WeWork signed on for an additional 39,000-square-foot invitations through a partnership with Crane floor at its 85 Broad Street location, WeWork FiDi, which is and Co., a premium, Boston-based cardmaker. its largest Lower Manhattan coworking office space. XO Group, a website publisher for The Knot, The Bump and The Nest, occupies 63,822 square feet in 195 Broadway and has been a Lower Manhattan tenant since 2011.

Lower Manhattan Real Estate Year in Review | 2016 8 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

LOWER MANHATTAN’S LARGEST TENANTS IN 2017 Source: Downtown Alliance, CBRE, CoStar Tenant Name SF Occupied Sector 1 City of New York 9,094,838 Government 2 New York State Government 2,360,690 Government 3 Goldman Sachs 2,100,000 FIRE 4 United States Federal Government 1,991,772 Government 5 AG 1,530,500 FIRE 6 Metropolitan Transportation Authority 1,474,981 Government 7 American Express Company 1,349,051 FIRE 8 American International Group (AIG) 1,543,659 FIRE 9 Bank of New York Mellon 1,293,758 FIRE 10 Condé Nast 1,268,132 TAMI, Media 11 Bank of America Corporation 1,234,752 FIRE 12 Morgan Stanley 1,185,206 FIRE 13 JPMorgan Chase & Co. 980,011 FIRE 14 McGraw-Hill 900,027 FIRE 15 Inc. 885,500 FIRE 16 Moody’s Corporation 884,985 FIRE 17 Port Authority of New York & New Jersey 854,307 Government 18 WeWork 775,226 Professional Services, Coworking 19 Time Inc. 701,647 TAMI, Media 20 Guardian Life Insurance Company of America 648,985 FIRE 21 Sullivan & Cromwell 634,108 Professional Services, Law 22 Royal Bank of Canada 594,367 FIRE 23 EmblemHealth 560,229 FIRE 24 522,938 TAMI, Technology 25 Cadwalader, Wickersham & Taft 509,178 Professional Services, Law 26 Cleary Gottlieb 501,413 Professional Services, Law 27 Hudson’s Bay Company 405,091 Retail Trade 28 Fried Frank, Harris, Shriver & Jacobson LLP 378,960 Professional Services, Law 29 United Federation of Teachers 353,534 Nonprofit 30 Aon Corporation 340,724 FIRE

Lower Manhattan Real Estate Year in Review | 2016 9 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

NEW COMPANIES MOVING IN DIVERSIFY OFFICE OCCUPANCY BY INDUSTRY, 2008 vs. 2016 OCCUPANCY AND EMPLOYMENT IN LOWER Source: Jones Lang LaSalle MANHATTAN Other Services Apparel & Retail Trade 7% 1% Impressive relocation activity and above average leasing in TAMI FIRE 5% past years has reshaped office occupancy in Lower Manhattan. , , 55% Many of the tenants that drove 2013 and 2014’s above Professional , average leasing activity have moved in, leading to a shift in Services the composition of industries south of Chambers Street. Most 13% 2008 notably, FIRE’s share of occupancy has dropped by nearly 20 percentage points from 55 percent to 37 percent from 2008 to Occupancy 2016; meanwhile, other industries have grown their impact on Education, by Health Care the market, including TAMI, Professional & Business Services & Nonprofit Industry and Apparel & Retail Trade. These trends are also evident in the 5% increasing diversification of Lower Manhattan’s employment market. In 2008, FIRE sector employment accounted for 43 Government percent of all private sector jobs in Lower Manhattan; today, this 14% share is down to 36 percent. But private sector employment is up nearly 8 percent since 2008 to more than 233,000 as other employment sectors — like Professional Services, TAMI as well as Other Services Hotel, Restaurants, Retailing, and Health care — have grown. Apparel & Retail Trade 3% 2% FIRE TAMI’s share of the market has more than doubled in eight years TAMI from 5 percent to 13 percent. Some of the tenants moving in 13% 37% during 2016 helping to drive this shift include: 2016 ●● Vox Media, a digital media company (with eight brands, Professional including Curbed and Eater), which moved into its Services Occupancy 85,000-square-foot headquarters in 85 Broad Street; 18% by ●● Mic, a millennial-focused news and media company, which Industry moved into its 36,099-square foot office on the 82nd floor of One World Trade Center. Education, Health Care & Professional Services’ share of the market rose to 18 percent Nonprofit 7% from 14 percent, driven in part by the boom in coworking space. Government Five separate coworking locations opened in 2016 totaling over 513K 20% SF 143,000 square feet. Among the largest: ●● Hudson’s Bay Company began relocating to its new North ●● The BOND Collective, formerly Coworkrs, opened its second American headquarters in Brookfield Place, moving into Lower Manhattan location in 40,000 square feet in 60 a 233,000-square-foot office in . It Broad Street. will eventually occupy more than 398,000 square feet in ●● WeWork Fulton Center opened its doors in a Brookfield Place. 32,000-square-foot space that spans the landmarked ●● Gucci America moved into its 83,964-square-foot space in and the Fulton Center hub. 195 Broadway from its former office at 54th Street and 5th Avenue. Fashion and Retail Trade occupy a small, 2 percent share of office space overall, but their presence in this market continues to grow.

Lower Manhattan Real Estate Year in Review | 2016 10 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

VACANCY RATE STABLE AT 10.2 PERCENT 85 Broad Street While new leasing activity has slowed, Lower Manhattan’s overall vacancy rate has risen just marginally year-over-year. This Today, 85 Broad Street, minimal shift is thanks to continued leasing from existing tenants a 1.1 million-square- moving within the district or renewing, leading to few large blocks foot property, is about being added to market availability. The overall vacancy rate 88% leased, following a successful repositioning crept up slightly over last quarter to 10.2 percent, according to and lease-up. In 2012, Cushman & Wakefield, but is up less than one percentage point the property was more year-over-year. It has hovered around 10 percent since the fourth than 75% vacant. Over quarter of 2015. the past several years, the property has attracted Over the last quarter, about 187,000 square feet of Class A major tenants, including Nielsen Media Research, WeWork and Vox Media. availabilities have been added to the market, inching the Class In addition, building owners added Le Pain A vacancy rate to 12.6 percent, up just under one percentage Quotidien to the base of the building in summer point from last quarter. The Class A vacancy rate has hovered 2015. MetLife and Beacon Partners have around 12 percent over the course of 2016. These new Class A put the building on the market, and reports say it availabilities include 143,000 square feet at 55 Water Street and could be valued for around $700 million. MetLife has owned the building since 1983 and Beacon 90,000 square feet that was put on the market at One Broadway. Capital purchased a 50% stake in 2014, valuing the property at $350 Million.

OVERALL VACANCY RATES BY SUBMARKET, Q4 2012 - Q4 2016 Source: Cushman & Wakefield

13%

12%

11% 10.2% 10% 9.3% 9%

8%

7% 6.3%

6%

5% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 2015 2016 Lower Manhattan Midtown Midtown South

Lower Manhattan Real Estate Year in Review | 2016 11 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Lower Manhattan’s market was bolstered by a solid year of renewal activity as new activity waned. Even without McGraw Hill’s blockbuster renewal for about 900,000 square feet (Manhattan’s top deal of 2016), the market posted nearly double the renewal activity of 2015, according to CBRE. Vacancy rates in the rest of Manhattan trended in a similar direction; Midtown South’s vacancy rate rose slightly to 6.3 percent, and Midtown’s vacancy rate also rose less than one percentage point to 9.3 percent.

55 Water Street 55 Water Street logged the top 2016 deal Manhattan-wide with McGraw Hill’s renewal 10.2% for more than 900,000 square feet. The Lower Manhattan’s city’s largest office building by square footage overall vacancy rate (3.6 million square feet) is also home to the Elevated Acre, one of Lower Manhattan’s three above ground parks.

LOWER MANHATTAN VACANCY RATES BY OFFICE CLASS, Q4 2012 - Q4 2016 Source: Cushman & Wakefield

16%

14% 12.6%

12%

10%

8% 7.3%

6.4% 6%

4% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Class A Class B Class C

Lower Manhattan Real Estate Year in Review | 2016 12 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

2016 ACTIVITY AND PENDING DEALS SHIFT LARGEST BLOCKS IN THE MARKET

Lower Manhattan’s largest blocks of available space shifted over after AIG put more than 216,000 square feet on the the past year as tenants relocated within the district and several market in the fourth quarter. pending deals were announced. There are six buildings with ●● 120 Broadway has 500,000 square feet available as the blocks over 500,000 square feet including. Among them: New York State Attorney General will be vacating about 428,000 square feet with its planned 2018 move to 28 ●● 3 World Trade Center has the largest block of space on the Liberty. This new availability drops the property to 72 market in Lower Manhattan, totaling 1.8 million square feet. percent leased from 96 percent leased. ●● 28 Liberty has the second largest block of space, totaling about 1.14 million square feet. In early 2017, the New Some of the biggest changes in large blocks of availability, if York State Attorney General announced that it had closed pending deals are completed, include the following properties. on this lease, dropping this building’s availability by about 345,000 square feet. ●● 4 World Trade Center, will be fully leased, if Spotify’s ●● One World Trade Center is 70 percent leased, up from 64 reported deal for about 400,000 square feet is completed. percent one year ago, and has about 911,000 square feet Currently, the building is over 80 percent leased, up from 70 left on the market. percent at the end of 2015.

●● 375 Pearl Street is 50 percent leased, up from 33 percent one year ago, with 580,000 square feet left to lease in the ● 180 Maiden Lane, will be about 69% leased, if the building. reported 300,000-square-foot lease with the New York City Department of Investigation ●● 32 Old Slip now has some of the largest space availabilities is completed. Currently, the in Lower Manhattan with 576,000 square feet available, building is 45 percent leased, up from 37 percent last year.

LOWER MANHATTAN’S LARGEST BLOCKS OF SPACE & AVAILABILITY, Q4 2016 Source: Downtown Alliance, CoStar, JLL, Cushman & Wakefield, Silverstein Properties &

70% Leased 3 Million

28% Leased 2.5 Million 50% Leased

2 Million 72% Leased

1.5 Million 49% 50% Leased Leased 1 Million

500,000 1.80 1.14 911K 580K 576K 513K MSF MSF SF SF SF SF 0 3 World Trade 28 Liberty St One World Trade 375 Pearl Street 32 Old Slip 120 Broadway Center Center

SF Available SF Leased

Lower Manhattan Real Estate Year in Review | 2016 13 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

AVERAGE ASKING RENTS FLAT, BUT REMAIN AT HISTORIC HIGHS Lower Manhattan Lower Manhattan’s average asking rents are largely flat year- over-year since reaching the highest level in the market’s history Average Class A Rent $62.40 in the fourth quarter of 2015. Meanwhile, other Manhattan submarkets have seen slight increases in asking rents year- over-year, leading to a stronger pricing advantage for Lower Midtown South Manhattan office space entering 2017. Average Class A Rent $83.60 Overall average asking rents in Lower Manhattan held steady at about $59 per square foot for the fifth consecutive quarter and are stable year-over-year. The rest of Manhattan has trended Midtown South oppositely: Midtown South and Midtown’s overall average asking Average Class A Rent $88.60 rents have increased 4.8 percent and 2.3 percent, respectively, from the end of 2015.

CLASS A ASKING RENTS BY SUBMARKET, Q4 2012 - Q4 2016 Source: Cushman & Wakefield

$95 $88.60

$85 $83.60

$75

$65 $62.40

$55

$45

$35 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Lower Manhattan Midtown Midtown South

Lower Manhattan Overall Average Asking Rent $59.30

Lower Manhattan Real Estate Year in Review | 2016 14 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Lower Manhattan’s Class A space (the bulk of available space However, as average Lower Manhattan asking rents remain on the market) has also experienced a flat asking rent, holding steady, brokers in the Lower Manhattan market have reported firm at $62 for the fourth quarter in a row. While there has been an increase in concessions to drive deals. As a result of all these some repricing in the market, the majority of Class A space changes, the district’s pricing advantage has increased from on the market is held in a collection of new and repositioned this time last year. The value is most compelling for Class A buildings, including 28 Liberty, One World Trade Center and 180 availabilities where the average Class A rent in Lower Manhattan Maiden Lane, which have held their asking rents largely steady. is now $26 below Midtown South, up from a $14 pricing Meanwhile, Midtown South’s Class A rents remain at about $88 difference one year ago. Lower Manhattan’s Class A average is for the second quarter in a row, up 15.3% year-over-year due to $21 less than the Midtown average, up from a $19 difference at the scarcity of available Class A space in this market. Midtown’s the end of 2015. Class A rent is also up, rising 2.4% year-over-year to $83.60.

Lower Manhattan Overall and Class A Asking Rents reached highest level in market’s history: Q4 2015

LOWER MANHATTAN ASKING RENTS BY CLASS TYPE Q4 2012 - Q4 2016 Source: Cushman & Wakefield

$70

$65 $62.40

$60

$55 $53.20

$50 $50.40

$45

$40

$35

$30

$25 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Class A Class B Class C

Lower Manhattan Real Estate Year in Review | 2016 15 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

PROPERTY SALES1 PROPERTY SALES VOLUME ($) BY PROPERTY TYPE, 2016 The investment sales market was active in 2016, with sales Source: Newmark Grubb Knight Frank volume reaching $3.6 billion across 27 closed transactions. This tops last year’s activity of $3 billion. Investment interest was par- ticularly active in the hotel and office sectors south of Chambers Street. Highlights of 2016’s property sales across key sectors are described below. Office Office 43%

More than $1.5 billion of office building transactions took place Land -Fee Office Condo in 2016 across five buildings including 2 Rector Street, 1 New Interest 3% 8% York Plaza, 44 Wall Street, 24 and 30 Broad Street. Among the largest transactions: Hotel Mixed 8% Use/ ●● Brookfield Properties sold a 49 percent stake in 1 New York Residential Plaza in the first quarter to China Investment Corp. for $700 Retail Condo million, valuing the Class A, 2.6 million square foot property 1% 21% at $561 per square foot. In the fourth quarter, Brookfield Student Housing sold another 15 percent stake for $223 million to AEW 5% Capital Management, a privately owned real estate manager, Development which valued the property at $1.4 billion. Brookfield recently Sites completed a repositioning of the building’s retail concourse 11% in 2015 and recent tenant move-ins include Revlon and FULLBEAUTY Brands. Brookfield now retains a 35 percent ownership stake in the tower.

●● In the first quarter, The Kushner Companies and CIM Group sold 2 Rector Street, a 440,000-square-foot office building, to a partnership between Bentall Kennedy, a pension fund, and Cove Property Group for $221 million or $502 per square foot. The previous owners purchased the property in 2013 for $140 million and had debated plans to convert the building into rental apartments.

●● In the second quarter, Real Estate of America, the equity investor arm of the Allianz Insurance companies, purchased a 49% stake in One Battery Park Plaza, a One New York Plaza 885,645-square-foot tower, from the Rudin Organization, for $178.9 million. The deal valued the property at $412 Brookfield Properties sold ownership stakes to per square foot, up from its $177 per square foot valuation two separate entities in 2016. The property is in 2012 when the Rose family sold its 50 percent stake to valued at $1.4 billion. Rudin.

1 Source of Closed Transactions: Newmark Grubb Knight Frank

Lower Manhattan Real Estate Year in Review | 2016 16 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Office Condominiums

Tenants across industry sectors purchased office condominiums, making significant investments.

●● In the second quarter, Sullivan & Cromwell, a longtime Lower Manhattan law firm tenant, purchased a 525,000-square- Doctors Without Borders foot office condominium on floors 2 - 16 in 125 Broad Relocates to 40 Rector Street Street from Mack-Cali for $202 million, or $385 per square foot. Sullivan & Cromwell has been a tenant since 1970 Doctors without Borders, a nonprofit, and now has full ownership of the 1.46 million-square-foot purchased two office condominiums, totaling building. Other tenants in 125 Broad Street include AECOM 44,178 square feet in 40 Rector Street, from Phillips International for a combined purchase Technology Corp., AXA Insurance Co. and Continental price of $41.4 million. Doctors without Casualty Co. This was Mack-Cali’s only Manhattan holding. Borders’ staff travels frequently and selected Lower Manhattan for its accessibility to ●● Nyack College, a private liberal arts college, purchased its transportation and area airports. 166,285-square-foot office space in17 Battery Place from the Moinian Group for $49.2 million in the first quarter. Nyack College, headquartered in Nyack, NY, increased its Advisors and Werber Management. The hotel is now closed, Manhattan presence when it opened the school in this and Howard Hughes’s future plans have not been confirmed. building in 2013.

●● Hersha Hospitality Trust sold its majority interest in two ●● Doctors without Borders, a nonprofit, purchased two office Lower Manhattan in the first quarter to Cindat Capital condominiums totaling 44,178 square feet in 40 Rector Management. Cindat Capital Management, a China-based Street from Phillips International for a combined purchase investment firm, purchased the majority interest in the price of $41.4 million, or about $931 per square foot. The 113-room Holiday Inn Wall Street, located at 51 Nassau nonprofit will relocate from a leased space in Midtown Street, for $38.3 million or $484,000 per key (Hersha last South in late 2017. It will join the Metropolitan College of purchased it in 2011 for $358,000 per key). Cindat also New York, a private nonprofit college, which moved into its purchased the majority interest in the Holiday Inn Express 100,000-square-foot space in mid-2016. Wall Street, located at 126 Water Street, for $35.8 million or $457,000 per key (Hersha last purchased it in 2011 Hotel for $327,885 per key). Hersha will remain as the minority partner in both of these hotels. Four Lower Manhattan hotels had ownership changes in 2016 with more than $300 million in investment activity. Among these Retail Condominiums trades: Four retail condominiums traded in 2016 reflecting about $46 ●● Union Investment Real Estate GmbH purchased The million in investment activity. Among these sales: Courtyard New York Marriott Downtown at 133 Greenwich Street from Hidrock Realty in the fourth quarter for $205 ●● The Gindi Family executed the largest retail condominium million or about $646,000 per hotel key. The 317-room hotel purchase of the year south of Chambers Street. The Gindi opened in November 2016. Hidrock will retain ownership of Family, owner of the Lower Manhattan-based Century the 2,600-square-foot retail space at the base of the hotel. 21 retail chain, purchased a 12,190-square foot retail condominium at 1 Coenties Slip from Northwind Group. ●● The Howard Hughes Corporation purchased the 72-key Best The purchase price, $19 million, values the retail property Western Plus Seaport Inn Downtown at 33 Peck Slip for at $1,559 per square foot. Northwind Group remains the $38.3 million in the first quarter from Gemini Real Estate owner of 42 rental apartments on higher floors and last purchased the entire building for $30.1 million in 2014.

Lower Manhattan Real Estate Year in Review | 2016 17 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

●● HUBB NYC purchased a 4,211-square-foot retail ●● I n the fourth quarter, DSA Property Group purchased 106 condominium in 37 Warren Street, an 18-unit luxury Fulton Street, a former 75,000-square-foot condominium building, for $11.2 million or $2,660 per residence hall, for $51 million. The purchase price is square foot from Fisher Brothers. The retail condominium is $680 per square foot, and rumored plans include a rental currently vacant and holds 2,847 square feet on the ground conversion. Pace University now has four active residence level and 1,364 square feet on the lower level. halls remaining with a population of about 2,400 in Lower Manhattan.

●● Florida Developers Group purchased a 2,016-square-foot Development Sites retail condominium, where the current tenant is Starbucks, from The Claremont Group at 99 Wall Street for $9.6 million One development site closed in 2016, representing a drop in or $4,774 per square foot. The Claremont Group currently activity from 2015 when eight sites were sold south of Chambers owns the rest of the building, which is converting into 52 Street. residential condominium units. ●● In the first quarter, China Oceanwide Holdings closed on its purchase of a development assemblage at 80 South ●● An undisclosed buyer purchased a 9,538-square-foot retail Street from The Howard Hughes Corporation (HHC) for condominium with ground and lower level space at the $390 million (or $476 per buildable square foot). The lot is base of The (a 283-unit residential capable of supporting 820,000 square feet of fully entitled condominium building), located at 20 West Street, for $6 development rights. The full site includes 80 , million, or $629 per square foot, from The Moinian Group. 163 Front Street and air rights from 163 Front Street and The current tenant is The Learning Experience, a day care 175 Front Street. center, and the entrance is located on the Washington Street side of the residential tower. Pending Deals Mixed-Use/Residential ● In the third quarter, JTRE Holdings announced it was in contract to purchase , the 145,000-square- Six mixed use properties, including residential rental units and foot former JP Morgan headquarters at the corner of Broad retail space, traded in 2016 for a total sales volume of more than and Wall Streets, for an unconfirmed purchase price from $765 million. Among the largest transactions: China Sonangol, a Chinese Oil Company. China Sonangol purchased the property in 2008 for $150 million from Africa ●● In the third quarter, the Boston-based private equity firm, Israel, an international real estate investor. In the fourth Rockpoint Group, purchased 63/67 Wall Street from a joint quarter, Uniqlo emerged as the rumored retail tenant for the venture between MetroLoft and DTH Capital. The residential property. property is comprised of two adjacent buildings and 810 units combined. The purchase closed for $429 million, or about $545,000 per unit, in September. Originally the headquarters for Brown, Brothers, Harriman & Co. and the Munshon Shipping Company, the properties were converted to residential use between 2003 and 2007 and also include 20,000 square feet of retail at the base of the building (now home to Sweetgreen, La Colombe, Tumi and La Maison du Chocolat). $3.6 Billion in Investment Market Sales in 2016 in Lower Manhattan

Lower Manhattan Real Estate Year in Review | 2016 18 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

RETAIL MARKET

As Lower Manhattan continues to undergo dramatic changes — a growing and affluent residential base, a rapidly diversifying office tenancy, surging tourism and ongoing investments in capital improvements — the area has emerged as a major shopping and dining destination. The significant retail activity at Westfield World Trade Center, Brookfield Place and the Seaport District are creating a positive spillover effect throughout the rest of the neighborhood, as more retailers recognize the benefits of locating in the district. Renowned restaurateurs and chefs are opening new locations in the neighborhood, while major fashion brands and lifestyle amenities are catering to the growing residential population.

Courtesy of L’Appart “Manhattan’s FiDi Is This Year’s Surprise, Hot L’Appart opened in Le District Restaurant Scene” – Bloomberg at Brookfield Place and earned Lower Manhattan’s At the end of 2016, the district had 1,170 stores and restaurants – a six first Michelin star. percent increase over 2015. A total of 202 new stores and restaurants opened in Lower Manhattan in 2016. The neighborhood now boasts 512 total full-service restaurants, bars and casual eateries with more than 82 percent open after 7 P.M. Once considered a culinary backwater, Lower Manhattan is now well on its way to becoming a genuine dining destination home to restaurants associated with many of New York City’s most prominent chefs and restaurateurs.

Nearly 80 full-service and casual-eating dining establishments across a variety of cuisines and price points opened this year, including Blacktail, Sauce & Barrel, 11 Hanover Greek, Ketch Brewhouse, Broadstone Bar & Kitchen, Schnippers, Shake Shack, Le Pain Quotidien, Sweetgreen, Bocadillo and Fioro. Joining the surging number of new eateries in 2016, celebrity chefs and restaurateurs Photo by Nick Solares for New York Eater brought a flood of culinary talent to the district, including: Keith McNally’s Augustine and Tom • Nicolas Abello’s L’Appart at Brookfield Place – the first Michelin- Colicchio’s Fowler & Wells were unveiled at starred restaurant in Lower Manhattan; The Beekman Hotel. • Jose Garces’ Amada at Brookfield Place;

• Mario Batali’s Eataly at Westfield World Trade Center;

• Daniel Boulud’s Epicerie Boulud at Westfield World Trade Center;

• Wolfgang Puck’s CUT at the Four Seasons Downtown;

• Tom Colicchio’s Fowler & Wells at The Beekman Hotel;

• Keith McNally’s Augustine at The Beekman Hotel;

• Sherry Yard’s The Tuck Room in The Seaport District;

• Edi Frauneder’s Schilling at 109 Washington Street. Courtesy of Schilling

Schilling debuted at 109 Washington Street.

Lower Manhattan Real Estate Year in Review | 2016 19 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Over the course of the next year, many more restaurants will open in Lower Manhattan: Blue Ribbon Federal Grill at the AKA Wall Street; Nobu at 195 Broadway; Westville and Fuku at 100 Wall Street; concepts by celebrated chefs Jean-Georges Vongerichten and David Chang in the Seaport District; and Daniel Humm at 3 World Trade Center.

Grocery Stores and National Chains Commit to Lower Manhattan The growing residential population and increasingly diverse office mix in the district are leading to a rise in food markets. In addition to the recent arrivals of Eataly and Le District, City Acres Market plans to open a 13,000-square-foot grocery store at , and Dean & Deluca will unveil an 18,500-square-foot gourmet food market and eatery at , both in mid-2017. Lastly, Whole Photo by Mark Weinberg for Utopia, The Agency Foods announced in July it would open a 44,000-square-foot grocery Eataly & other eateries store at the base of One Wall Street, which is being converted to a residential tower. The grocer expects to open in late 2018.

Large brand-name stores continue to open throughout the district, providing shopping at all price points. Target opened a 45,000-square-foot location at 255 Greenwich Street in October 2016, making it the second Manhattan location for the big box retailer. Anthropologie plans a 20,000-square-foot store at 195 Broadway, while Saks Off 5TH will open a 55,000-square-foot location in One Liberty Plaza (both are scheduled for 2017). Marshalls announced it would open a 68,400-square-foot location at 140 West Street – the second largest retail deal in New York City 3 WORLD in 2016. Additionally, in a testament to the market’s strength, Zara TRADE took an additional 10,000 square feet at 222 Broadway, growing retailer’s footprint to 40,000 square feet.

New Retail Developments In August 2016, Westfield World Trade Center became an instantly identifiable landmark when its 100 stores and restaurants, located in Santiago Calatrava’s Oculus and at the base of the 3 and 4 Photo by Mark Weinberg for Utopia, The Agency World Trade Center buildings, debuted. Santiago Calatrava’s Oculus • The list of brands at Westfield World Trade Center includesApple and Bose in technology; Boss Hugo Boss, H&M, Kate Spade, John Varvatos, LK Bennett, Lacoste and Banana Republic in apparel; Under Armour in the athletic category; Sephora, Caudalie, Kiehl’s, MAC and Dior Cosmetics in beauty; Cole Haan, Stuart Weitzman, Aldo and Vince Camuto in footwear; as well as Breitling, London Jewelers, Links of London and Swatch in jewelry.

• Alongside Eataly’s 40,000-square-foot Italian marketplace on the third floor of 4 World Trade Center, the property includes Shack Shack (at Fulton Center), Lady M. and Epicerie Boulud - plus several cafes and eateries. Slated to open in 2017 are fresh Over 100 retail shops food/gourmet grocer Market Lane and the London steakhouse Hawksmoor in 3 World Trade Center.

Lower Manhattan Real Estate Year in Review | 2016 20 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

• Connected via an underground pedestrian passage to Fulton Center, the World Trade Center Transportation Hub (which opened in March 2016) provides seamless access to 12 subway lines, the PATH train to New Jersey, Ferry Terminal, Brookfield Place and the World Trade Center complex.

Coming off the heels of a major renovation in early 2015, several notable retailers joined the shopping and dining offerings at Brookfield Place, including Warby Parker, Jo Malone, Davidoff of Geneva Cigars, Kamakura Shirts, Hickey Freeman, Joie and an 85,000-square-foot Saks Fifth Avenue women’s department store. Opening in late February 2017 will be a dedicated Saks Fifth Avenue men’s Allen Edmonds Suit Supply department store, and . Photo by Romer Pedron for Saks Fifth Avenue Adding to the complex’s rich dining mix, L’Appart opened within Le Saks Fifth Avenue debuted its District and earned a Michelin star – the first for a Lower Manhattan women’s department store in establishment. Looking ahead, Del Frisco’s Grille will also open next Brookfield Place. A men’s store summer along Vesey Street. will open in February 2017.

The Seaport District had an active 2016, with a number of openings, public programs and announcements, setting the stage for what the future of the District will look like later in the year when the retail district debuts. The Howard Hughes Corporation continued construction on Pier 17, which, when completed in 2018, will feature a one-and-a-half-acre rooftop entertainment space. The new pier and revitalized historic area will provide roughly 400,000 square feet of retail, dining and entertainment. • iPic Theaters debuted its first New York City location in the Fulton Market Building. The 500-seat, eight-screen luxury movie theater serves as a cornerstone tenant in the Seaport’s Courtesy of Macklowe Properties transformation. In addition, The Tuck Room opened on the third floor of the building. Whole Foods announced it will • Following an earlier announcement, Jean-Georges open a 44,000-SF market at Vongerichten will be the culinary anchor within the Seaport One Wall Street in 2018. District. The celebrated chef will launch two major projects: a 40,000-square-foot, fresh food marketplace inside the Tin Building and a 10,000-square-foot restaurant in the newly opened Pier 17. Joining Jean-Georges on the pier is the Momofuku Group led by David Chang. Both are scheduled to open in 2017.

• Milan-based 10 Corso Como announced it will unveil a 13,000-square-foot experiential store in the Fulton Market Building, its first U.S. location.McNally Jackson Books and Scotch & Soda plan to open locations along Schermerhorn Row, while by CHLOE., a fast-casual restaurant, will open along Front

Street. The retailers anticipate opening later in 2017. Courtesy of iPic Theaters

• Throughout 2016, The Howard Hughes Corporation continued to iPic Theaters opened an eight- activate the historic Seaport with innovative programming and screen, luxury movie theater in events, including the return of the popular Seaport Smorgasburg, the Seaport District at the Fulton Seaport Design Market and the Seaport Cultural District. Market Building.

Lower Manhattan Real Estate Year in Review | 2016 21 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Macklowe Properties received landmarks approval in early 2016, paving the way for the conversion of One Wall Street into 524 apartments. The property will feature over 100,000 square feet of retail, including a newly created glass storefront on the adjacent, non-landmarked Annex building and the repositioning of the mosaic Red Room in the landmarked, Art-deco tower. Whole Foods announced in July it would open a 44,000-square-foot grocery store, expected to debuted in late 2018.

At 28 Liberty Street, Fosun Property Holdings is in the process of creating hundreds of feet of new storefront, restoring the historic parapet to its original condition and creating a larger plaza by removing mechanical components. The site will offer more than Courtesy of BlackTail 200,000 square feet of retail below the plaza. Fosun is also in BlackTail, from the team behind The Dead active negotiations with a hospitality partner to run the catering and Rabbit, opened a Cuban-themed speakeasy at events space on the 60th floor of the tower. Pier A. Retail Rents While Manhattan’s overall retail leasing market saw softening in ground floor asking rents, Lower Manhattan’s ground floor retail asking rents along lower Broadway (Battery Park to Chambers Street) have increased by 20 percent over the past year to an average of $369 per square foot, according to the Real Estate Board of New York (REBNY). Key areas along Broadway and Wall Streets are experiencing asking retail rents as high as $600-per-square- foot. The continued strength is being attributed to “increased foot traffic from the World Trade Center complex and the openings of the Courtesy of Target Oculus and Fulton Center transit hub,” according to REBNY. Target unveiled its first flexible- format store at 255 Greenwich Street in . LOWER MANHATTAN AVERAGE ASKING RETAIL RENT Source: Real Estate Board of New York

$400 $369

$350 $326 $308 $300 $257 $265 $250 $232 $226 $234

$200 $184 $180

$144 $152 $150

$100

$50

Courtesy of Broadstone Bar & Kitchen $- Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall Spring Fall Broadstone Bar & Kitchen opened a three- 2011 2012 2013 2014 2015 2016 level pub at 88 Broad Street. Note: Rents reflect available ground floor space only on Broadway, between Battery Park and Chambers Street.

Lower Manhattan Real Estate Year in Review | 2016 22 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

TOURISM & HOSPITALITY

2016 was a record-breaking year for hospitality, as 60.7 Hotel Development Takes Off million people visited New York City, according to NYC & By the end of 2016, hotel inventory reached nearly 6,560 hotel Company. As the city experiences a rise in tourism, Lower rooms throughout Lower Manhattan — a 35 percent increase in just Manhattan is leading the way with 14.8 million unique two years. While Lower Manhattan makes up a smaller piece (six visitors in 2016, representing a five percent increase from percent) of New York City’s total hotel inventory of 109,000 hotel 2015 and a 19 percent increase from 2014. Last year saw record-breaking crowds at the National September 11 rooms, ten percent of hotel rooms under construction in all of New Memorial Museum and the /Ellis Island. All York City are in Lower Manhattan. this leisure and business travel has attracted the attention of the hotel industry, sparking a hotel building surge in the Seven hotels opened in 2016, adding 1,264 rooms: last several years and adding new brands, ranging from • The Four Points by Sheraton at 6 Platt Street with 262 luxury to boutique to budget. The number of hotel rooms is rooms. The hotel also features Ketch Brewhouse. expected to grow by 33 percent by the end of 2018. • The Riff Downtown Hotel at 102 Greenwich Street with 36 rooms.

Record Year for Tourism • The at 60 Pine Street added Lower Manhattan welcomed 14.8 million unique visitors in 33 rooms. The membership-based social club has been in 2016, up five percent from 2015. The National September 11 operation since 1860. Memorial Museum (which opened in May 2014) had 6.6 million • AKA Wall Street at 84 William Street with 140 rooms. The visitors in 2016, an incredible 120 percent increase over the conversion of the former office building into an extended-stay past year. According to TripAdvisor, the Memorial was named the hotel also features Blue Ribbon Federal Grill, opening in early “most trending” attraction in the United States, spurring a 425 2017. percent spike in traveler interest in visiting the site. The Statue • The Beekman Hotel opened in the historic Temple Court of Liberty and Ellis Island attracted 4.5 million visitors last year, building at 123 Nassau Street with 287 hotel rooms. The hotel the highest number of visitors the landmarks have ever seen. features two restaurants: Fowler & Wells by Tom Colicchio and Not since 2000, the year before the September 11th attacks, Augustine by Keith McNally. has the visitorship been this high. • The Four Seasons Hotel New York Downtown opened at 27 Barclay Street with 189 hotel rooms. The hotel LOWER MANHATTAN HOTEL DEVELOPMENT features a full-service spa and CUT by Wolfgang Puck, the Source: Downtown Alliance celebrity chef’s first restaurant in New York City.

10,000 • The Courtyard by Marriott WTC at 133 Greenwich 8,701 9,000 Street with 317 rooms. 7,684 8,000 6,562 7,000 Over 2,100 hotel rooms in 13 hotels are currently in the

6,000 development pipeline. In 2017, inventory is expected to grow by up 5,370 4,934 to 17 percent, as over 1,100 rooms in six properties will come online 5,000 4,118 throughout the year. If all these projects meet current deadlines, 4,000 the hotel inventory in Lower Manhattan will reach 7,680 rooms by 3,000 year-end 2017. 2,000

1,000 The hotel development boom is bringing a diversity of hotel brands,

0 targeting both business and leisure travelers, across multiple-price 2010 2011 2012 2013 2014 2015 2016 2017 2018+ points. While 2016 saw the arrival of higher-priced hotels (AKA, Four Existing Hotel Rooms New Hotel Rooms Projected Hotel Rooms Seasons and the Beekman), the market share of mid-priced hotel rooms (such as Aloft, Courtyard, Moxy and Hotel Indigo) in Lower Manhattan will grow from 19 percent in 2013 to 52 percent in 2019. Source of visitor estimates: Audience Research & Analysis

Lower Manhattan Real Estate Year in Review | 2016 23 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Those hotels scheduled for completion in 2017 include: • The Artezen Hotel at 24-26 John Street, 89 rooms;

• Fairfield Inn & Suites at 100 Greenwich Street, 192 rooms;

• Hilton Garden Inn at 6 Water Street, 250 rooms;

• Marriott Residence Inn at 215 Pearl Street; (upper floors) 120 rooms;

• Courtyard by Marriott at 215 Pearl Street; (lower floors) 200 rooms,

• AC Hotel by Marriott at 151 Maiden Lane, 271 rooms. LOWER MANHATTAN HOTEL DEVELOPMENT PIPELINE Source: Downtown Alliance Owner/ Rooms/ Open Hotel & Address Developer Floors Date

The Artezen Hotel Westbury Realty 1 24 John Street Associates 89/21 2017 Photo by Mark Weinberg for Utopia, The Agency 2 Fairfield Inn & Suites Jiten Hotel 192/25 2017 100 Greenwich Street Management The Four Seasons HotelCourtesy ofNew One World York Obsevatory Magna Downtown opened at 27 Barclay 3 Hilton Garden Inn Hospitality 250/29 2017 6 Water Street Group Street with 189 rooms and 120/40 featuring Wolfgang Puck’s first 4 Marriott Residence Inn Lam Group (upper 2017 215 Pearl Street floors) NYC restaurant, CUT. 200/40 5 Courtyard by Marriott Lam Group (lower 2017 215 Pearl Street floors)

AC Hotel | Marriott Fortis Property 6 151 Maiden Lane Group 271/33 2017

Moxy Hotel Tribeca 7 143 Fulton Street Associates 228/26 2018

TBD Hotel Premier Emerald 8 11-13 LLC 143/27 2018

Extended Stay Hotel 9 17 John Street Networks 81/23 20188

Hotel Indigo 10-12 MLane 10 8-12 Maiden Lane Inc. 190/25 2018

Hotel Indigo 11 120-122 Water Street Hospitality 122/31 2018

Aloft Hotel Fit Investment 12 50 Trinity Place Group 173/29 2018

TBD Hotel 150/ 13 265 Broadway Roe Corporation 12 (of 42) TBD Total Hotels in the Pipeline 13 Total Hotel Rooms in the Pipeline 2,139 Photo by Mark Weinberg for Utopia, The Agency The Beekman Hotel opened at 123 Nassau Street with 287 growth in rooms and signature restaurants hotel rooms between 2014 by Tom Colicchio & Keith 35% & 2016 McNally.

Lower Manhattan Real Estate Year in Review | 2016 24 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

RESIDENTIAL MARKET

2016 was another strong year for the Lower Manhattan residential market. Many high-profile projects were completed, leasings and closings occured throughout the year, and more than 1,200 units came to market. 2017 will add even more 70 Pine Street residential product to the market with another 1,500 units coming online by year’s end. Leasing is underway Inventory and Development at AIG’s former Lower Manhattan has close to 31,000 units in 324 mixed-use and headquarters by residential buildings and an estimated population of approximately Rose Associates. The 61,000. There are more than 4,200 units in 28 buildings under tower includes 644 construction or planned for development, with 56 percent planned luxury rental units as rental units and 44 percent as condos. According to the New and a 132-room York Building Congress, Lower Manhattan’s residential pipeline Q&A Hotel. accounts for six percent of the 52,000 housing units anticipated to be completed citywide between 2017 and 2018. Retail includes a This year, 1,236 residential units in six buildings were added to the City Acres Market, market (68 percent rental and 32 percent condo). Among them: La Palestra fitness, Black Fox Coffee • Rose Associates’ conversion of the historic AIG office building at and a roof top bar 70 Pine Street continued with the roll out of its 644 luxury (coming soon). rental units throughout 2016.

Courtesy of CoStar • Rudin Management’s 110 Wall Street completed the conversion of a former office building, with WeWork opening both an office and its first residential offering, WeLive. The micro-unit concept that focuses on establishing a community-driven living concept added 232 units throughout the year, housing 600 30 Park Place people. Silverstein Properties • Silverstein Properties’ Four Seasons Residences at 30 Park completed the Four Place debuted in October. The 82-story tower has 157 condo Seasons Residences. units and also features the newly opened 189-room Four Seasons The 82-story tower Hotel New York Downtown on the first 20 floors. includes 157 condo • Magnum Real Estate began welcoming residents to the top 22 units and the 189- floors at the former at100 Barclay Street. room Four Seasons The tower features 166 condo units and approximately 100,000 New York Downtown square feet of retail at the base. Hotel at the base.

• The Beekman Residences at , a 51-story tower with 68 condo units, opened this past fall. The new In addition to hotel & residential tower was joined by the opening of the 287-room spa amenities, CUT Beekman Hotel; both were developed by GFI Development and by Wolfgang Puck GB Lodging. also debuted.

Courtesy of Silverstein Properties

Lower Manhattan Real Estate Year in Review | 2016 25 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

HIGHLIGHTS OF LOWER MANHATTAN RESIDENTIAL DEVELOPMENT Total Units Under Construction & in Planning Stages: 4,200+ The pipeline of residential development includes over 1,500 units in Source: Downtown Alliance eight buildings under construction (79 percent rental and 21 percent Address & Lease & Units Open Date condo) with plans to open in 2017. Among them: Building Name Building Type Rental Units Under Construction TOTAL 2,025

60 Fulton Street Rental • At the tail end of 2016, 50 West Street, a 65-story, 191-condo 1 Exhibit New Construction 120 2017 unit tower developed by Time Equities, received its certificate of 180 Water Street Rental 2 Conversion 565 2017 occupancy. Closings will continue through 2017. Construction of the West Thames Pedestrian Bridge will begin this year, connecting 3 20 Broad Street Rental 521 2017 Conversion a new plaza adjacent to 50 West Street to Battery Park City. 4 112-118 Fulton Street Rental 483 2018 New Construction • The Claremont Group plans to complete its conversion of 101 Condo Units Under Construction TOTAL 1,103 Wall Street to 52 condominiums by spring 2017. 1 50 West Street Condo 191 2017 New Construction • The former parking garage at 60 Fulton Street has now been 12 Warren Street Condo replaced by a 23-story, 120-unit rental building. The building is 2 New Construction 13 2017 being developed by Socius Development Group and the Brauser 101 Wall Street Condo 3 Conversion 52 2017 Group and will include 24 affordable units.

19 Park Place Condo 4 New Construction 21 2017 • Emmes Realty is currently converting 180 Water Street into 2 Park Place Condo 565 rental units. The conversion will also include the addition of 5 Woolworth Residences Conversion 34 2017 seven stories to the building. Condo 6 1 Seaport New Construction 80 2018 • Alchemy Properties continues its historic conversion of the top 30 49-51 Chambers Street Condo 7 New Construction 81 2018 floors of2 Park Place. The Woolworth Residences will have 34 condo units. Condo 8 New Construction 157 2018 • MetroLoft is undertaking the conversion of 20 Broad Street, a 9 Condo 288 2018 New Construction 27-story office building adjacent to the , Rental/Condo 10 Conversion 336/188 2018 into 521 rental apartments. The building will also include the addition of 70,000 square feet of retail. 1 Beekman Street Condo 11 New Construction 31 2018

45 Park Place Condo 12 New Construction 50 2018 Residential development activity is anticipated to increase

23-31 Park Row Condo throughout the next couple of years, as 21 projects comprising over 13 New Construction 108 2019 2,700 units (50 percent condo and 50 percent rental) are planned Condo & Rental Buildings Planned for Development 907 to come to market in 2018 and beyond. Among them: 1 30 Warren Street Condo 23 2018 New Construction • Fortis Property Group continued construction this year on a

130 William Street Condo 60-story, 80-condo unit tower at 161 Maiden Lane, known as 2 New Construction 244 2019 1 Seaport. The property will also be adjacent to a new, 271-room 75-83 Nassau Street Rental/Condo 3 New Construction 197 2018 AC Hotel by Marriott. The hotel and condo tower are expected to be 77 Greenwich Street Condo complete in 2017 and 2018, respectively. 4 Former Syms site New Construction 85 2019

45 Broad Street Condo • Macklowe Properties received landmarks approval in early 2016 5 New Construction 150 2019 for the conversion of One Wall Street. The tower, now under 86 Warren Street Rental 6 New Construction 40 TBD construction, is expected to include 336 rental apartments and

102 John Street Rental 188 condominiums. The building will offer over 90,000 square feet 7 New Construction 92 TBD of retail, including a recently announced 44,000-square-foot Whole 81 Warren Street Condo 8 New Construction 12 TBD Foods. The tower was purchased for $585 million in 2014, and its

106 Fulton Street Rental anticipated completion is in 2018. 9 Conversion TBD TBD

265 Broadway Condo/Hotel • Soho Properties broke ground this year on a 43-story, 50-unit 10 New Construction 38 TBD luxury condo tower at 45 Park Place. The tower, planned for TOTAL UNITS IN THE PIPELINE 4,226 2018, will also include a public plaza connected to a three-story For complete residential pipeline, please see “Lower Manhattan Residential Islamic museum and prayer space. Pipeline 4Q 2016”.

Lower Manhattan Real Estate Year in Review | 2016 26 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

• Michael Shvo, who bought 125 Greenwich Street for $180 million, will partner with Bizzi & Partners to build a 91-story, Rafael Vinoly-designed building with 288 condo units and retail at the base. The building broke ground this past year and is 77 Greenwich anticipated to be complete in 2018. Street • Fisher Brothers and the Witkoff Group continues construction at 111 Murray Street for a 62-story, 157-unit condo tower. The Trinity Place building, the site of the former St. Johns University building, is Holdings announced expected to be completed in 2018. the redevelopment of the former Syms • Urban Muse began foundation work for a 25-story, 31-unit condo Department Store tower at One Beekman Street. The building, adjacent to into an 85-condo City Hall Park, is expected to be finished in spring 2018. unit tower. A public • Construction continues at 112-118 Fulton Street for a primary school will 63-story, 483-rental unit building. Carmel Partners purchased also open at the the demolished site from Lightstone Group in 2014 for $171 building’s base. million – a 170 percent increase in the original price Lightstone paid in 2013 in acquiring the parcels and air rights. The building Completion is set for is expected to be completed in late 2018. 2019. • 130 William Street is undergoing demolition to make room for the Lightstone Group’s planned 50-story tower. The new Courtesy of Trinity Place Holdings building will adjoin soon-to-be demolished buildings at 90-94 Fulton Street and will include 244 condo units. Plans for an on-site hotel were scrapped this past year. Completion is set for early 2019. One Wall Street • Madison Equities filed plans for a 1,100-foot, 150-unit condo tower at . The tower will also have an office The historic office component at the base. Completion is anticipated for 2019. building is being • In early 2016, Trinity Place Holdings announced the converted to 188 redevelopment of the former SYMS clothing store at 77 luxury condo and Greenwich Street. The tower will comprise 85 condo units 336 rental units and a public primary school at the building’s base. The company by Macklowe anticipates a 2019 completion. Properties.

• In the collection of buildings along Park Row once occupied by J&R Music and Computer World, L&M Development filed plans The building will for a new, 54-story, 108-unit condo tower at 23-31 Park Row. include 90,000 The new residential tower will also include 52,000 square feet of SF of retail space, retail. Demolition of the J&R buildings is finished, and completion including a 44,000- is expected in 2019. SF Whole Foods Market. • Pace University sold its dormitory building at 106 Fulton Street to DSA Property Group for $51 million in 2016. The developer plans to repurpose the 15-story building for rental use. Completion is set for Unit counts and completion date are TBD. 2018. Courtesy of CoStar

Lower Manhattan Real Estate Year in Review | 2016 27 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Residential Rental Market MEDIAN RENTAL PRICE According to residential statistics published by Miller Samuel/ Source: Miller Samuel/Douglas Elliman Douglas Elliman, Lower Manhattan’s median rent, $3,660, $3,800 decreased one percent over the last quarter and remained flat $3,700 year-over-year. Median rents across comparable neighborhoods1 $3,600 remained flat, as concerns of an oversaturated luxury apartment $3,645 $3,660 market have made headlines; listing discounts have hovered $3,500 between two and three percent. $3,400

$3,300

Residential Sales Market $3,200

The median condo sales price of $1.25 million dipped about two $3,100 percent over the past quarter and seven percent year-over-year. $3,000 Median sales prices hit a high water mark in late 2015 at $1.35 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 million and have been showing buyer push back. Across comparable 2015 2016 geographies, the median sales price for Manhattan’s east side (defined as east of 6th Avenue, between E. 96th and E. ) Lower Manhattan Downtown East Side West Side saw the greatest increase over the past quarter and past year, at MEDIAN SALES PRICE 19.2 and 4.5 percent, respectively. The increase on Manhattan’s Source: Miller Samuel/Douglas Elliman east side can be attributed to the arrival of the first phase of the $1.5 M Second Avenue subway. $1.4 M Due to new residential product entering the market and an emerging $1.35 M $1.25 M $1.3 M shopping and dining scene, the number of condo sales in Lower Manhattan increased significantly with the total number of sales up $1.2 M by 50 percent year-over-year. A total of 625 condo sales transactions $1.1 M took place in 2016, a 24 percent increase over the previous year. $1.0 M

The average price per square foot (PPSF) in Lower Manhattan has $.9 M shown steady growth over the past year. The district’s average PPSF $.8 M of $1,925 saw a dramatic increase of 38 percent year-over-year, Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 marking the highest average PPSF across comparable geographies. 2015 2016 The higher PPSF can be attributed to closings in premier new Lower Manhattan Downtown East Side West Side developments, like 30 Park Place and 100 Barclay Street, which are in the $3,000 per square foot range (similar to new luxury AVERAGE SALES PRICE ($) PER SF developments across Manhattan). Source: Miller Samuel/Douglas Elliman

$2,000 $1,925 increase in average price- $1,900 $1,800 per-square-foot for Lower $1,700 Manhattan condos & $1,600 38% co-ops, 2016 $1,500 $1,400 $1,394 Source or residential sales and rental data: $1,300 Miller Samuel/Douglas Elliman $1,200 1Lower Manhattan defined as south of Chambers Street to the $1,100 Battery. Downtown defined as south of W. 34th and E. 42nd Street to $1,000 . East Side defined as east of 6th Avenue, between E. 96th Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 and E 42nd Street. West Side defined as west of 6th Avenue, between W. 116th and W. 34th Street. 2015 2016

Lower Manhattan Downtown East Side West Side

Lower Manhattan Real Estate Year in Review | 2016 28 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

MAJOR PROJECTS UPDATE

Worth St Worth St Worth St Harrison St Momentum continues at the

Church St Church World Trade Center (WTC) Thomas St

and elsewhere throughout Lower Manhattan. The St Lafayette Jay St The World Trade Center Transportation Hub

World Trade Center Transportation Hub was finally Centre St Centre Staple St Staple The 800,000-square-foot, Santiago Calatrava-designedPearl St World Trade Park Row

unveiled in March 2016. In mid-August, Westfield World Pl Trimble Duane St Center TransportationDuane St Hub officially opened in early March 2016, Trade Center debuted its retail offerings ofHudson over St 100 providing underground access to One World Trade Center, 4 World Trade

stores and restaurants. Shoppers and commuters can St James Pl Pearl St

now transverse a seamless underground pedestrian Center, Brookfield Place and Elk St the PATH trains. In June 2016, additional Reade St Cardinal Hayes Pl walkway from Fulton Center to the World Trade Center underground access became available to Church and Vesey Streets (base Transportation Hub, 4 World Trade Center, One World of future Tower 2) and to Fulton Center via the Dey Street Connector. The Elk St Madison St TradeChambers Center St and Brookfield Place.Chambers Designs St were temporary PATH station is now closed and is undergoing deconstruction in revealed for the new Performing Arts Center at the WTC, preparation for the Ronald O. Perelman Performing Arts Center. Westfield’s while several open spaces became newly available to

Broadway West St West 365,000-square-foot retail complex opened in the transit hub on August Warren St the Warrenpublic St during theWarren summer St months of 2016. Over the 16th, 2016. Underground connection to the E train station debuted in past year, over 320,000 square feet of office leases were Centre St

December, while access to the R train station from the World Trade Center St Pearl

signed in 4 and One World Trade Center. Broadway West West St West St Church

River Te River Murrayis anticipated St to open in late 2017. The 1 train station at Cortlandt Street is

expected to open in the complex by mid-2018. Brooklyn Bridge

WORLDAv End North TRADE CENTER AREA 2016 PEDESTRIAN IMPROVEMENTS Greenwich St Greenwich Frankfort St Park Pl Murray St InfrastructureSt Rose Greenwich Street Broadway 1 Spruce St West Concourse Reconstruction Reconstruction Dover St Opens to Pedestrians Improvements Fully Opens & Completed Beekman St

Connects Brookfield Temporary PATH Park Row West St West Summer 2017 Place to The Oculus Station Removed Gold St

& Fulton Center Vesey St Broadway Increase Pedestrian Vesey St Nassau St WTC Transportation Ann St

Church St Church Peck Sl

Hub, Plaza & Retail Pearl St 300 2 WTC Flow Around 1 WTC Concourses Open Water St VESEY 250 VESEY 200 VESEY Fulton St Beekman St William St Fulton St WEST CONCOURSE FULTON North End Av End North World Trade Center World Brookfield CENTER Front St Financial Center Place DEY ST. CONNECTION Ferry Terminal Westfield WTC Ryders Al

Cliff St 225 John St LIBERTY 3 WTC Dey Street Concourse FROM BROADWAY Opens & Connects 9/11 Memorial Cortlandt St John St North & Museum PATH to Fulton Center Pearl St Cove Liberty Street TO BROOKFIELD PLACE Gold St Pier 17 Pedestrian Bridge Maiden La (Under Construction) Opened 4 WTC seamless undergroundPlatt St South St pedestrian passage Liberty St Liberty St

Liberty Park Pier 16 Fletcher St Maiden La

Nassau St 200 LIBERTY Vehicle Security Pier 15 Center & Liberty Cedar St Park Open West Street Proposed Thames Pine St

Sidewalk Access Street Pedestrian Restored St West Retail Plaza Front St Wall St

Rector St West Thames Street Wall St Rector Pl Pedestrian Bridge to begin Construction via Fulton Center & Rector Pl Exchange Pl

Trinity Pl Trinity Exchange Al World Trade Center

Water St Gouverneur La Washington St Washington

William St Edgar St Beaver St Pier 11/Wall St

J.P. Ward St E 90th St / Brooklyn Army Terminal / Yankee Stadium (Seasonal) Greenwich St Greenwich Transportation Hub FranklinNew D. YorkRoosevelt Water Drive Taxi South End Av End South West Thames St Broad St - Ferries to JC and Hoboken / E 34th St / Highlands NJ /

Front St

Broadway Mill Ln New St New 100 Old Slip Police Museum Morris St 3 Pl

Stone St Morris St Lower Manhattan Real Estate Year in Review | 2016 Beaver St Pearl St 29

S William St Marketfield St South Cove 2 Pl

South St

South End Ave End South

Washington St Washington West St West

Greenwich St Greenwich Stone St

1 Pl St West Little Water St

Battery Pl Whitehall St Pearl St Pier 6 - Wall Street Heliport Moore St Broad St ² Bridge St Battery Pl State St

Pearl St Whitehall St

State St South St

Government, Institutional and Religious Buildings 4

3 Transportation Statue Of Liberty & 2 Ellis Island Ferries

1 Clipper City Ship Public Open Space FOR INTERNAL USE ONLY Downtown Alliance Boundary Office Buildings

Residential KEY: Hotels

Hotel/Residential

Under Construction

ALLIANCE FOR DOWNTOWN NEW YORK, INC Map of Lower Manhattan October 2015 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

The Ronald O. Perelman Performing Arts Center (The Perelman Center) In September, designs were revealed for The Ronald O. Perelman Center for Performing Arts at the World Trade Center, proposing a 90,000-square-foot, cube-shaped building. Wrapped in translucent marble will be three theaters of varying sizes, with the potential to combine them to form seven unique performance spaces. Brooklyn-based firm REX is the lead architect. In summer 2016, philanthropist Ronald Perelman announced he was donating $75 million to the project. With Perelman’s donation, the project took a significant stride toward its estimated $240 million cost. The Lower Manhattan Development Corporation (LMDC) committed $100 million in federal funds awarded after September 11th for the project’s design, Photo by Mark Weinberg for Utopia, The Agency construction and administrative costs. The site for the Perelman Center is the former, now demolished PATH entrance at Greenwich Street and World Trade Center , which closed this summer when the World Trade Center Transportation Hub Transportation Hub opened with additional entry points. The project is slated The 800,000-SF transit hub opened in for a 2018 groundbreaking and a 2020 completion. March and includes underground pedestrian 3 World Trade Center access to the PATH, Fulton Center, WTC office The 2.5 million-square-foot office tower topped out at 80 floors in June complex and Brookfield Place. 2016 and will be completed in Spring 2018. In late 2015, anchor tenant GroupM Worldwide finalized an expansion, adding 170,000 Withing the transit hub, Westfield’s 350,000- square feet to the existing 520,000 square feet signed in 2014. The SF retail complex opened in August with over tower is currently 28 percent leased. 100 shops and restaurants. After over a year of negotiation between Silverstein Properties and 21st Century Fox and News Corp to anchor 1.3 million square feet, the deal was called off in early 2016. Silverstein will postpone work on the tower until an anchor tenant agrees to lease a substantial portion of the building. 4 World Trade Center The 72-story, 2.3 million-square-foot office tower was completed in November 2013. The building is over 80 percent leased to MediaMath, PadillaCRT, SNY (SportsNet New York), Silver Suites, IEX, Morningstar, the Port Authority and the City of New York. During 2016, over 270,000 square feet of offices leases were signed, including: Zurich American Financial Company (132,000 square feet), Global Atlantic Group and Validus (70,000 square feet combined) and Hudson River Trading (69,000

Rendering by Luxigon for The Perelman Center square feet). At the end of the year, news agencies reported Spotify, the world’s largest music streamer, was focusing on leasing the remaining The Ronald O. Perelman space in the building, bringing it to 100% occupancy. Performing Arts Center One World Trade Center Significant strides were made toward The 104-story, 3.1 million-square-foot office tower opened on November funding, including a $75M donation from 3rd 2014. One World Trade Center is 70 percent leased; tenants include Ronald Perelman, for whom the performing Condé Nast, High 5 Games, Moody’s, xAd, China Center New York, Mic arts center will be named. Network and the U.S. General Services Administration. Over the past year, Ameriprise Financial signed a 37,000-square-foot lease, and Infosys inked Designs were revealed this past summer a 14,000-square-foot lease. The Durst Organization and Port Authority also with groundbreaking expected in 2018 and announced plans for a tenant amenity floor scheduled to open in the first completion in 2020. quarter of 2017 and the expansion of its pre-built and built-to-suit program to another three floors, growing to a total of nine floors.

Lower Manhattan Real Estate Year in Review | 2016 30 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE MAJOR PROJECTS UPDATE

Vehicle Security Center (VSC) & Liberty Street Bridge West Street. According to the New York City Economic Development The Vehicle Security Center (VSC) is the World Trade Center’s main entry Corporation (NYCEDC), completion is anticipated in early 2018 and point for automobiles, trucks and buses. Operated by the Port Authority, the will replace the Rector Street pedestrian bridge. The Battery Park City VSC will provide deliveries, tenant and bus parking for those with affiliations Authority and the Lower Manhattan Development Corporation have with the World Trade Center. It became fully operational in 2016. voted to rename the bridge after Robert Douglass, former chairman of the Downtown Alliance and longtime advocate of Lower Manhattan. Water Street Rezoning Return of W Local Train In June, the City Council took a major step toward realizing the The Metropolitan Transportation Authority brought back the W local train Downtown Alliance’s vision for a vibrant, pedestrian friendly Water in late 2016. The train is running again after a six-year hiatus on the Street when they approved the Water Street text amendment. This N/Q/R/W line in advance of the Second Avenue subway, which opened innovative zoning proposal was a collaborative effort between the January 1, 2017. The line operates only on weekdays and terminates Downtown Alliance, the New York City Department of City Planning at Whitehall Street and includes Lower Manhattan stops at City Hall, and the New York City Economic Development Corporation. The new Cortlandt Street, Rector Street and Whitehall Street-South Ferry. zoning incentivizes Water Street property owners to make significant South Ferry Station upgrades to nearly a quarter million square feet of privately-owned The MTA announced the main entrance to the South Ferry station public plazas along the street, while allowing for the conversion of will reopen in June 2017 after being closed for the past few years underused pedestrian arcades into nearly 110,000 square feet of new to replace Sandy-damaged equipment and put flood mitigation retail space. FEMA and the NYC Department of Buildings are discussing measures into place. During restoration, the old South Ferry station flood proofing interventions for any horizontal enlargements made to remained operational and accessible from alternative entrances. The buildings citywide, which includes future arcarde infill on Water Street. $340 million restoration allowed the station to receive permanent flood protection measures and become wheelchair-accessible. Infrastructure & Resiliency Citywide Ferry Service Street Reconstruction In summer 2017, Mayor de Blasio will debut the first phase of the The Department of Design and Construction’s (DDC) $42 million new citywide ferry service. In addition to the existing East River Ferry, capital reconstruction project on Broadway, referred to as Broadway 1 there will be five new routes, providing a total of 21 landings citywide. and stretching from Ann Street to Rector Street, began in 2014 and is Phase I routes to Astoria, South Brooklyn and the Rockaways are done. Reconstruction of Warren Street, stretching from Broadway to anticipated for 2017, while in 2018, Phase II routes will be added to West Street begins in February 2017 and is scheduled to be finished the Lower East Side and Soundview in the Bronx. All routes will have in Summer 2019. Once the Warren Street reconstruction is complete, a stop at Pier 11-Wall Street. One-way tickets will cost $2.75, and 4.6 an identical project will begin on John Street, from Broadway to William million trips are projected annually. Street. These projects will replace all underground infrastructure, Federal, State & City Investments including water mains, sewers, electric, gas and other utilities, as well as Earlier in 2016, the de Blasio administration announced that $100 construct new streets and curbs. million in City capital funds would be allocated to support coastal West Thames Pedestrian Bridge resiliency in Lower Manhattan as part of a larger resiliency project The pedestrian bridge planned for West Thames Street is slated funded by the U.S. Department of Housing and Urban Development’s to begin construction early this year. The bridge will span West National Disaster Resilience Competition. The money has been Street and will feed into a new privately-owned public plaza at 50 allocated to build a network of flood walls, berms and deployable flood

Water Street Rezoning Map

Arcade

Plaza

Building Ground Floor Seaport Water Street Subdistrict

Pier 17 Pier 15 Whitehall BMB Pier 11

Lower Manhattan Real Estate Year in Review | 2016 31

OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE MAJOR PROJECTS UPDATE barriers to protect the southern tip of Manhattan from flooding. The project will extend from the Lower East Side, around the tip of the island, all the way to Battery Park City. Separately, the City set aside nearly $15 million, including $6.75 million from the City and State, for preliminary design and environmental review and another $8 million for first-phase flood protection design and implementation in Battery Park. The City’s Economic Development Corporation kicked off design work for the Lower Manhattan coastal resiliency initiative in the summer of 2016 and plans to complete its design work later in 2017.

Open Space Courtesy of The Battery Conservancy The Battery The Battery Conservancy unveiled the Battery Oval, a two-acre lawn, to the Liberty Park public in June 2016 by debuting 300 moveable chairs. Plans are now being finalized for an expanded 1.4-acre playground that will feature climbing nets, a slide mountain and kid-oriented performance spaces. Design and In The Battery, the SeaGlass Carousel opened construction on the new playground is expected to be completed in late this summer, while the Battery Oval, a three- 2019/early 2020 and will be funded with $8 million through the Parks acre lawn, will reopen to the public in spring 2016. Department, $6 million through the Lower Manhattan Development Corporation and $2 million from donors of The Battery Conservancy. Liberty Park The 1.5-acre elevated park, located on the roof of the World Trade Center Vehicle Security Center (VSC), opened in late June 2016. The Port Authority also announced the return of Fritz Koenig’s “Sphere for Plaza Fountain” to the World Trade Center site, set at Liberty Park. The Liberty Street Bridge, also opening at the same time on the west side of the park, can now connect pedestrians to Brookfield Place in Battery Park City. Sidewalk pedestrian access under the bridge opened this fall, allowing ground-level access from the 9/11 Memorial to the Greenwich South neighborhood. The eastern side of the new park will feature the new $35 million, Santiago Calatrava-designed St. Nicholas Greek Orthodox Church. The church broke ground in late 2014 and is expected to open in the first half of 2018. Elizabeth H. Berger Plaza Located between Trinity Place and Greenwich Street at the eastern exit of the Brooklyn-Battery Tunnel, Elizabeth H. Berger Plaza will be created by Courtesy of The Battery Conservancy joining two disconnected, underutilized plazas. The resulting new plaza will have a cohesive design with increased pedestrian safety, plush landscaping The Battery Oval and space for public programming. The project is going through approval processes, and work is expected to begin by the end of 2017. Governors Island The 172-acre, seasonal park debuted The Hills, a $71 million public-private project, in July 2016. The four man-made hills range in heights from 25 to 70 feet and include slides, art installations and never-before-seen views of New York Harbor. The island welcomed nearly 600,000 visitors over the course of the 2016 season and will now be open to the public on May 1, extending public access from 120 days to 146 days. Commercial tenancy will arrive with the opening of QC Terme, a day spa, in 2018. The next goal for Governors Island is to transform into a 365-day destination by activating Photo by Timothy Schenck, courtesy of the Trust for Governors Island historic buildings and another 33 acres of land for commercial purposes. The Hills at Governors Island

Lower Manhattan Real Estate Year in Review | 2016 32

Visit www.downtownny.com/research for additional publications on the Lower Manhattan real estate market and economy. Documents comprise a complete list of residential and hotel developments, available

retail spaces, a summary of leasing incentives and other research reports, including:

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 11th investments and the area’s status as a burgeoning center for some of New York City’s highest value, most dynamic industries;

The Brain Gain, 2015 Report, updated report on how the region’s shifting demographics continue to favor the

Lower Manhattan Business District. Previously released in 2012, updated data shows an even stronger trend;

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 how the more than $6.4 billion of transit investments made since 2005 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.

Alliance for Downtown New York 120 Broadway Suite 3340 New York, NY 10271 212.566.6700 DowntownNY.com Telephone: 212-835-2787 Email: [email protected]