OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

ALLIANCE FOR DOWNTOWN LOWER REAL ESTATE MARKET REPORT Q2 2018

LOWER MANHATTAN MARKS STRONGEST LEASING QUARTER IN SEVEN YEARS AND CELEBRATES THE OPENING OF AND PIER 17

Lower Manhattan’s commercial market had a particularly Positive news abounds on the east side as well with the robust second quarter. Major brand-name tenants closing opening of Pier 17. Now home to ESPN Broadcasting deals in the TAMI (Technology, Advertising, Media and Studios, the pier will host concerts through the fall and Information) and fashion sectors helped make this the most several restaurant openings are expected by year-end. In active quarter in seven years. J.Crew signed the largest deal of additional good news for the Seaport District, the Mr. C the quarter at Brookfield Place where they will be moving their Seaport Hotel opened this summer. This quarter’s strong headquarters to a 325,000-square-foot office from Midtown leasing activity helped mitigate the long expected increase South. in the vacancy rate resulting from 3 World Trade Center’s completion. Finally, private sector employment remains Three World Trade Center’s opening brings the total office at its highest level since September 11, 2001 (242,593 square footage on the World Trade Center campus to 7.8 employees). million square feet. In addition, McKinsey & Company executed the quarter’s second largest deal at 3 World Trade Center and will be relocating their headquarters from Midtown. LOWER MANHATTAN WELCOMES 3 WORLD TRADE CENTER TO THE MARKET

Photo Courtesy of . By Joe Woolhead.

Lower Manhattan Real Estate Market Report | Q2 2018 1 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

SECOND QUARTER LEASING BEST SINCE Q2 it surged most dramatically in Lower Manhattan. At mid-year, 2011 leasing in Manhattan overall is up 12 percent as compared to 2017, while Lower Manhattan’s year-to-date activity is off 12 Lower Manhattan leasing more than doubled from the first percent from this time last year. quarter levels. In the second quarter there was 1.9 million square feet of new activity. This represents the best quarter for new BRAND NAME TENANTS TOP LARGEST SECOND activity since the second quarter of 2011 and it also places well QUARTER DEALS above the five-year quarterly average of 1.3 million square feet. The World Trade Center and Brookfield Place continued to top A flurry of large deals boosted this quarter with more than 24 the charts of Lower Manhattan’s largest deals with two deals leases of over 20,000 square feet signed, according to Cushman signed for over 100,000 square feet. J. Crew inked the largest & Wakefield. deal of the quarter and the fifth largest citywide deal after committing to relocate their headquarters from 770 Broadway With this rebound, year-to-date activity now totals about 2.7 to 325,000 square feet in 225 Liberty Street in Brookfield million square feet in Lower Manhattan. While leasing was up Place. J.Crew’s commitment marks the largest relocation since in Midtown and Midtown South quarter-over-quarter as well, Spotify announced its move to in early 2017. J. Crew’s move absorbed Bank of New York Mellon’s sublease space placed on the market after their February 2018 announcement that the bank would be consolidating in 100 Barclay Street. The relocation announcement is the latest in a slew of media and fashion industry firms that have long been 1.9 Million SF headquartered in Midtown and Midtown South moving south of Chambers Street. This move further enriches the Lower Q2 New Leasing Activity Manhattan fashion community which already includes Hudson’s

LOWER MANHATTAN NEW LEASING ACTIVITY BY QUARTER, Q2 2011 - Q2 2018 Source: CBRE

2. Million 2.5 MSF 2. Million

2.2 Million Best Quarter since Q2 2011 2.0 Million 1.9 MSF

1. Million

SF 1. Million

1.2 Million

1.0 Million

0,000

00,000

20,000

0 2 1 2 1 2 1 2 1 2 1 2 1 2 1 2 2011 2012 201 201 201 2016 201 2018

Lower Manhattan Real Estate Market Report | Q2 2018 2 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

LOWER MANHATTAN TOP LEASES, Q2 2018 Source: Downtown Alliance, CBRE, JLL, CoStar, Colliers International

SF Tenant Name Location Transaction Type Sector Leased

1 J. Crew Group Inc. 225 Liberty Street 325,000 Relocation Retail Trade

Professional Services, 2 McKinsey & Company 3 World Trade Center 184,389 Relocation Management Consulting

3 Wolters Kluwer 28 Liberty Street 130,000 Relocation TAMI, Media

Moving within LM 4 National Debt Relief 180 Maiden Lane 95,284 FIRE and Expanding Professional Services, 5 Convene 1 Liberty Plaza 93,096 New LM Location Coworking

6 MDRC 200 54,735 Relocation Nonprofit

7 IQVIA (Quintiles/IMS) 300 Vesey Street 45,927 Relocation TAMI, Technology

8 Scotia Bank 225 Liberty Street 43,374 Expansion FIRE

9 Virtusa Corporation 225 Liberty Street 42,705 Relocation TAMI, Technology

10 TerraForm 42,291 Relocation Other, Utilities

11 Getty Images 195 Broadway 41,982 Relocation TAMI, Media

12 CallisonRTKL 233 Broadway 28,098 Relocation Professional Services, Design

Professional Services, 13 Knotel 30 Broad Street 26,982 New LM Location Coworking

14 Outfront Media 140 Broadway 26,206 Relocation TAMI, Advertising

15 Millbank Tweed 33 Whitehall Street 25,605 Moving Within LM Professional Services, Legal

16 Community Access Inc 17 Battery Plaza 25,075 Moving Within LM Nonprofit

17 Collibra 61 Broadway 24,479 Expansion TAMI, Technology

18 Hello Alfred 61 Broadway 22,327 Relocation TAMI, Technology

19 NYFD Pension Fund 1 Battery Park Plaza 20,679 Relocation Government

American Civil 20 125 Broad Street 18,245 Expansion Nonprofit Liberties Union

Lower Manhattan Real Estate Market Report | Q2 2018 3 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Bay, also headquartered at Brookfield Place, Hugo Boss, Gucci, NEW LEASING ACTIVITY BY INDUSTRY, 2018 YTD MM.LaFleur, Bottega Veneta and more. Source: Jones Lang LaSalle Other Services The second largest deal of the quarter was completed by Government . McKinsey & Company. Announced in November 2017, the Education, Healthcare 2.9 .1 premier management consulting firm signed a lease for 184,389 & Nonprofit square feet on floors 60 through 64 in 3 World Trade Center. The “Big Three” firm will begin relocating its NYC headquarters to the Professional TAMI World Trade Center from Midtown East this summer. Services .9 11.2 2018 Year-to-Date TAMI AND FLEXIBLE SPACE PROVIDERS New Leasing CONTINUE TO DOMINATE TOP DEALS Activity by Industry After a subdued first quarter, activity rebounded in the second quarter as TAMI (Technology, Advertising, Media and Information FIRE industries) companies and flexible space providers (defined as 1.6 Flexible Space Providers .1 short term office, coworking, event/conference space companies, etc.) returned as the largest dealmakers. Year to date, TAMI *by Square-footage Fashion & Retail Trade 1. has accounted for 36 percent of all new activity in Lower Manhattan, just up from 2017’s level, according to Jones Lang LaSalle. Combined with leasing by flexible space providers, these moving from Midtown East to a 42,705-square-foot office in industries were responsible for more than 43 percent of all new 225 Liberty Street. TAMI tenants were active on Broadway as activity in 2018 to date. well. Getty Images, an international photo and multimedia agency, announced a relocation from Hudson Square to a Wolters Kluwer, an information services firm for industries new 42,000-square-foot headquarters in 195 Broadway. 195 including law, accounting, healthcare and more, signed the Broadway is currently 70 percent leased by TAMI companies. third largest deal in the second quarter and will be relocating Other TAMI commitments across the district include Hello Alfred, from Google’s 111 Eighth Avenue to 130,000 square feet in a New York-based home service technology company, which 28 Liberty. This marks 28 Liberty’s largest lease since the signed a lease for 22,327 square feet at 61 Broadway and has New York State Attorney General signed for 379,000 square already moved into a portion of BIG’s (Bjarke Ingels Group) feet in February 2017. Convene, a hospitality focused flexible former office space from Midtown South. office and meeting services provider, announced that it will be opening another Lower Manhattan location after signing a Finally, Knotel, one of Lower Manhattan’s 23 flexible space 93,096-square-foot lease in 1 Liberty Plaza. This commitment providers, signed on for its fourth district location with a marks Convene’s fourth partnership with 26,982-square-foot lease at 30 Broad Street. and its fourth location in Lower Manhattan. Convene will be operating a coffee shop and cafe on the building’s ground floor, FIRE SECTOR AND NONPROFITS REMAIN with its other operations on the mezzanine, second, and third ACTIVE IN LOWER MANHATTAN floors. With this lease, Convene’s Lower Manhattan footprint now totals over 190,000 square feet, making them the third largest In the second quarter, the FIRE (Financial Services, Insurance flexible space provider south of Chambers Street behind WeWork and Real Estate) sector accounted for the second largest and Regus. share of new leasing activity after TAMI and helped to drive quarterly activity to its highest point in seven years. While The second quarter also yielded a steady flow of mid-size Deutsche Bank announced its 2021 relocation to Columbus leases from TAMI tenants. IQVIA (Quintiles/IMS), a healthcare Circle from longtime offices in 60 Wall Street in May 2018, data analytics company, will be relocating from Midtown East Lower Manhattan continued to welcome new activity from to 46,000 square feet in 300 Vesey Street. Another TAMI tenants in the financial services sector. The fourth largest deal firm,Virtusa Corporation, also announced a relocation to of the quarter was signed by National Debt Relief, a consumer Brookfield Place. The information technology firm will also be debt relief agency, who will be moving and expanding from 11

Lower Manhattan Real Estate Market Report | Q2 2018 4 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Broadway to a 126,0000-square-foot office in 180 Maiden Lane, with about 84,000 employees. This is an increase of about 3.8 after signing a 95,284-square-foot deal in the second quarter percent year over year. Citywide, FIRE employment is up 1.9 and a 30,810-square-foot expansion in late July. In addition, percent over the same period. ScotiaBank expanded for a second time in 2018, signing on for an additional, short term, 43,374-square-foot floor in 225 A nonprofit education and social policy organization,MDRC , Liberty Street. Year to date, FIRE sector activity has accounted signed a 54,735-square-foot lease on the 23rd floor of 200 Vesey for about 18 percent of new activity in Lower Manhattan, just Street. The 44-year old nonprofit will be relocating from Midtown behind Midtown (23 percent) and more than double Midtown and joins other significant non-profit tenants including Teach for South (8 percent). In Lower Manhattan, FIRE sector employment America, Planned Parenthood, and the American Civil Liberties comprises about 35 percent of total private sector employment Union.

195 BROADWAY: FROM HOME OF FIRST TRANSATLANTIC PHONE CALL TO 21ST CENTURY TAMI HEADQUARTERS Long known as the Telephone Building, 195 Broadway is not only among Lower Manhattan’s oldest existing landmarked buildings -- it’s history tells the story of technological advance as we have progressed from telephone cables on the ocean floor to the omnipresent interconnectivity of our current digital age.

Nine years after it opened in 1916, the tower was the site of the American end of the first transatlantic phone call. After AT&T moved to midtown in the 1980s, the building went through a series of ownership changes. L&L Holding Company purchased the building in 2005 and helped attract a series of tenants that transformed the building. Today, 195 Broadway is a draw for cutting edge companies and is almost exclusively rented out to fashion and TAMI tenants, including some of the biggest names in technology. XO Group is the owner of digital brands The Knot, The Nest, The Bump and much more. Namely is a human resources technology company and Getty Images will relocate to the tower later this year. Other tenants in media include Omnicom, HarperCollins Publishers and Abrams Publishing.

L&L also presided over a multi-million dollar lobby redesign and retail redevelopment project that brought Anthropologie and Nobu to the building’s ground floor. It was most recently purchased in 2013 by institutional investors advised by JP Morgan Asset Management while L&L retains a minority interest.

Lower Manhattan Real Estate Market Report | Q2 2018 5 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

VACANCY RATE UP TO 11.3 PERCENT WITH ADDITION OF THREE WORLD TRADE CENTER

In the second quarter, Lower Manhattan’s overall vacancy rate space at and a 106,320-square-foot rose, as expected, above 11 percent for the first time since Ambac Financial Group space at One State Street. the first quarter of 2014 due to the addition of 3 World Trade Center to the market. The addition of 1.6 million square feet of Sublet space is usually priced below average asking rents and availability was responsible for the bulk of the 2.3 percentage in recent quarters other sublet spaces have successfully been point increase over last quarter. Overall, available space rose by re-leased. BNY Mellon put about 350,000 square feet on the about 2.3 million square feet over the last quarter, with other market at 225 Liberty in early 2018 at Brookfield Place and significant additions at 199 Water Street. more than 325,000 square feet of this space has already been absorbed by J.Crew’s planned move to Lower Manhattan. While Lower Manhattan charted this long-anticipated increase in its vacancy rate, Midtown and Midtown South’s overall vacancy rates were stable over last quarter at 9.2 percent and 6.7 percent, respectively. Q2 2018 Sublet

Lower Manhattan’s direct vacancy rate is currently 9.9 percent Vacancy Rate in and its sublet vacancy rate is 1.3 percent. This is on par with Lower Manhattan its historical average as well as with levels in other submarkets. 1.3% However, a few substantial Lower Manhattan sublet spaces loom on the horizon including Condé Nast’s 350,000-square-foot

WORLD TRADE CENTER SUBMARKET AND OVERALL LOWER MANHATTAN VACANCY RATE, Q3 2013 - Q2 2018 Source: Cushman & Wakefield

2.0 21.9 22.

20.0

1.

1.0 1.9

12. 10.9 10.0 11. .

.0 1 2 1 2 1 2 1 2 1 2 201 201 201 2016 201 2018 World Trade Center Submarket Lower Manhattan

Lower Manhattan Real Estate Market Report | Q2 2018 6 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

WORLD TRADE CENTER AND BROOKFIELD PLACE INK QUARTER’S LARGEST DEALS

Leasing activity in the World Trade Center submarket has accounted for about half of Lower Manhattan’s activity so far this year. This is up significantly from its share in 2017 (38 percent) and in 2016 (27 percent), according to Cushman & Wakefield. In the second quarter, seven of the top ten largest deals in Lower Manhattan were recorded in the World Trade Center submarket. Three World Trade Center is 38 percent leased, on par with committment levels at 4 and One World Trade Centers on their opening days. Today, 4 World Trade Center (opened in November 2013 ) is fully leased and One World Trade Center (opened in November 2014) is 78 percent leased. While the World Trade Center submarket’s overall vacancy rate rose this quarter to 13.9 percent with the addition of 3 World Trade Center, strong leasing in this submarket has historically dropped this vacancy rate within several quarters. This submarket’s vacancy rate was above 14 percent two years ago and dropped to less than 10 percent in the first quarter of this year just prior to the opening of 3 World Trade Center.

Lower Manhattan Real Estate Market Report | Q2 2018 7 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

LOWER MANHATTAN OVERALL ASKING RENT REACHES MARKET HIGH WITH 3 WORLD TRADE CENTER ADDITION Lower Manhattan Asking Rents

The addition of 1.6 million square feet of new Class A space at 3 World Trade Center propelled Lower Manhattan’s overall Class A average asking rent to $62.90 per square foot, the highest $66.50 overall average asking rent in the market’s history. Higher priced space was also added at Pier 17 where Howard Hughes is now marketing about 110,000 square feet of office space. These Class B $54.90 additions pushed the average Class A asking rent to a record asking price of $66.50. Elsewhere in the district, rents are largely stable. The average Class B asking rent declined slightly from last Class C quarter to $54.90 yet is still up 3.9 percent year-over-year. $45.00

LOWER MANHATTAN ASKING RENTS BY CLASS Q3 2013 - Q2 2018 Source: Cushman & Wakefield

$0 Highest Class A Asking Rent in Market’s History 66.50

$6

$60

54.90 $

$0

45.00 $

$0

$

$0 1 2 1 2 1 2 1 2 1 2

201 201 201 2016 201 2018

Class A Class B Class C

Lower Manhattan Real Estate Market Report | Q2 2018 8 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

SECOND QUARTER PROPERTY SALES Development Sites

Lower Manhattan logged a second consecutive quarter of quiet Howard Hughes Corporation purchased 250 Water Street, a investment activity with few closed sales across market sectors development site with about 290,000 buildable square feet, and just two announced sales in the hotel and office sectors. from Milstein Properties for $182.7 million or about $632 per buildable square foot. Milstein purchased the property in Retail the 1970s for $5.8 million and sold the property after several development plans failed to come to fruition. In June, Unibail-Rodamco-Westfield, a European property company, closed on the purchase of the 287,000-square-foot Office Westfield World Trade Center from Westfield Corporation for $240 million or about $836 per square foot. In May, Westfield Pending World Trade Center approved a takeover by Unibail, who will In May, a partnership between Rockwood Capital and Midtown rebrand its malls under the Westfield name under the terms of Equities, announced the purchase of One Broadway, a the deal. The Lowy family (founders of the Westfield Corporation) 253,000-square-foot office building located at the southern end will retain a minority 2.5 percent interest in the combined of Broadway for about $140 million or about $553 per square company. Unibail owns many European malls in iconic locations foot from Stoffel & Partners. The property’s most recent office and gains significant U.S. and other global retail centers with tenants include Kenyon and Kenyon, a law firm, and Citibank. this takeover. This deal represents the combining of two of the Kenyon and Kenyon will be consolidating in their Midtown world’s largest retail mall operators. location. Rumored plans for the 1920 International Merchant Marine Corp. building include repositioning the building for Hotel continued office use. Midtown Equities most recently redeveloped the Empire Stores on the DUMBO waterfront in . In the second quarter, the Riff Hotel, a recently opened 36-room hotel, was purchased by The King’s College, a Lower Manhattan based college, for $19.2 million or about $533,000 per hotel room from Salt Equities, the hotel’s developer. The college plans to utilize the property as a residence hall for its Lower Manhattan students. The King’s College signed a lease for a 51,750-square- foot Lower Manhattan campus in 2012 and relocated fromw Midtown.

Pending In May 2018, Blackstone’s purchase of the Holiday Inn Wall Street from LaSalle Hotel Properties for $67.7 million was announced but has yet to close. The 138-room hotel has been open since 2008.

Multifamily

15 Cliff Street, a 157-unit rental property, was purchased for $125.4 million by Brookfield Asset Management from One Broadway Carmel Partners. 15 Cliff Street opened in 2003 and sold for Rockwood Capital and Midtown Equities approximately $798,726 per unit. Carmel Partners is also purchased this 1920 office building currently developing the 483-unit residential rental tower, 19 located across from Bowling Green and Dutch, on , anticipated to start welcoming residents the National Museum of the American later this year. Indian for $553 per square foot. The property is expected to be repositioned to

Courtesy of Newmark Holdings attract new office tenants.Courtesy of CBRE

Lower Manhattan Real Estate Market Report | Q2 2018 9 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

RETAIL MARKET

New Openings and Announcements Lower Manhattan retail continued to expand in the second quarter of 2018. Pier 17 opened in the Seaport District and a variety of new retailers also opened across the district. By the end of 2019, Lower Manhattan will have more than 7.28 million square feet of retail -- an expansion of 2.92 million square feet since 2014.

Westfield World Trade Center welcomed back the NYC greenmarket at the beginning of summer, which is open every Tuesday on the outdoor plaza. With the June opening of 3 World Trade Center and the surrounding plaza spaces, an entirely new street level restaurant collection is on the horizon. Over 75,000 square feet of retail and restaurant space will open throughout 2019. Courtesy of Manhatta

At Brookfield Place, popular seafood eatery Seamore’s opened along Vesey Danny Meyer’s Manhatta & The Bay Room event space Street in early July, while Sant Ambroeus, the fashionable Italian restaurant, will th open early next year. opened on the 60 floor of 28 Liberty Street. The Seaport District is full steam ahead for a busy 2018 with a number of its shops and eateries opening this summer and fall. The Pier 17 rooftop concerts by LiveNation will begin in August, while various summer pop ups and activations are underway. The popular Pacific Coast Highway eatery,Malibu Farm, announced they will open a 6,000-square-foot restaurant on Pier 17, joining restaurants by Jean-Georges Vongerichten, David Chang and Andrew Carmellini. Additionally, the SJP Collection, a boutique by Sarah Jessica Parker, announced it will open at the corner of South and Fulton Streets. The shops and restaurants expect to open this fall.

Photo by Adrian Mesko Courtesy of Primo’s With 13 new retailers opening in Lower Manhattan in the second quarter, the district now has 1,193 stores and restaurants. The eateries and retailers that Primo’s, a cocktail bar, opened in the second quarter include: opened in the Frederick Hotel at 125 Chambers Street. • Manhatta, Danny Meyer’s newest restaurant, was unveiled on the 60th floor of 28 Liberty Street. The adjacentBay Room, with room for over 500 people, is Union Square Hospitality Group’s first dedicated event space; • Bellini, an Italian and seafood concept from the Cipriani family, opened at the new Mr. C Seaport hotel at 33 Peck Slip; • Primo’s, a stylish cocktail bar offering light bites, opened in The Frederick Hotel at 125 Chambers Street; • Vintage 61, a sports bistro with a wine focus, opened at 233 Front Street in the Seaport; • Don Wagyu, a small spot serving Japanese wagyu katso sandwiches, opened at 28 South William Street; Courtesy of Toro Loco • Toro Loco, a Mexican restaurant and bar, opened at 15 Stone Street; and Toro Loco, a Mexican • Sons of Thunder, a Hawaiian and Californian-inspired casual restaurant and bar, opened restaurant, opened at 225 Pearl Street. at 15 Stone Street.

Lower Manhattan Real Estate Market Overview| Q2 2018 10 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

TOURISM & HOSPITALITY

Record Year for Tourism Lower Manhattan continues to be a growing destination for tourists. In 2017, approximately 13.6 million tourists visited Lower Manhattan, up nearly eight percent from 20161. An estimated 17.4 million unique visitors (a figure that includes residents of and the surrounding area who don’t work or live in Lower Manhattan) visited the district in 2017 — a 17 percent increase from 2016. Visitors from throughout the city and the tri-state area were likely drawn to well publicized new destinations such as the Oculus and Brookfield Place. As a whole, New York City welcomed a record number of 62.8 million tourists in 20172. This was an increase of 2.3 million over 2016. Hotels Check-in to Lower Manhattan At the end of the second quarter, there were 7,118 rooms in 33 hotels throughout Lower Manhattan. Two hotels opened in the past few Courtesy of The Assemblage months: The Assemblage opened • In May, the Assemblage opened at 17 John Street with at 17 John Street with 79 hotel rooms. The former residential building was 79 extended-stay hotel converted by Prodigy Networks into an extended-stay hotel rooms and 44,000 SF of with 44,000-square-feet of collaborative space, including collaborative communal coworking and event spaces, film screening room, outdoor space, coworking and terraces and a rooftop deck. event spaces and outdoor • Mr. C Seaport at 33 Peck Slip was unveiled in early July terraces. with 66 luxury hotel rooms, as well as it’s signature Italian restaurant, Bellini. The former Best Western was converted by Atlantic Pearl, in partnership with the Cipriani family and the Howard Hughes Corporation. With 12 hotels and 1,900 hotel rooms currently under construction or in the development pipeline (including 658 rooms in three hotels expected to open in the remainder of 2018), inventory is expected to increase by up to 21 percent in the next few years. If all projects continue as planned, the hotel inventory in Lower Manhattan will reach 9,019 rooms in 45 hotels by 2020.

Increase in

Hotel Rooms in Courtesy of Mr. C Seaport Lower Manhattan 21% Mr. C Seaport opened by 2020 at 33 Peck Slip in the Seaport District with 66 luxury hotel rooms, as well as signature Italian & seafood restaurant, 1 Source of Lower Manhattan tourism estimates: Audience Research & Analysis Bellini. 2 Source of New York City-wide tourism figures: NYC & Company

Lower Manhattan Real Estate Market Overview| Q2 2018 11 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Average Daily Room Rate Up Year-Over-Year LOWER MANHATTAN HOTEL DEVELOPMENT PIPELINE Source: Downtown Alliance Lower Manhattan’s average daily room rate (ADR) in the second quarter of 2018 was $284, up 2.4 percent year-over-year. New Owner/ Open Hotel & Address Rooms Floors York City’s ADR1, only about $10 more than Lower Manhattan’s Developer Date ADR, also increased slightly, by 5.5 percent year-over-year to Westbury 1 The Artezen Hotel Realty 89 21 2018 $295. The second quarter’s average occupancy rate was 88.3 24 John Street Associates percent -- two percentage points below the citywide average1. AC Hotel NYC Fortis The occupancy rate of Lower Manhattan hotels decreased by 3.4 2 Downtown Property 271 26 2018 Group percentage points from Q2 2017. 151 Maiden Lane Moxy NYC Positive signs on the horizon include growing tourism, expanded Tribeca 3 Downtown Associates 298 30 2018 retail and restaurant offerings, and new and repositioned 26 Ann Street office product which are expected to continue to drive business 4 The Fidi Hotel Premier 143 27 2019 and leisure travel to Lower Manhattan. The positive outlook 11 Stone Street Emerald LLC for demand generators and a slowdown in citywide hotel Marriott 120 development are encouraging hotels to push room rates higher, 5 Residence Inn Lam Group (upper 40 2019 215 Pearl Street floors) despite a modest dip in occupancy year-over-year. Additionally, efforts to regulate the booming home-sharing industry, including Courtyard by 200 6 Marriott Lam Group (lower 40 2019 legislation recently adopted by the New York City Council, could 215 Pearl Street floors) reduce the availability of units listed by companies such as Airbnb. Hotel Indigo Atlas This could shift some demand and pricing power back to the hotel 7 120-122 Water Hospitality 122 31 2019 Street market especially on key sellout nights. Hotel Indigo 10-12 8 8-12 Maiden Lane MLane Inc. 190 25 2019

Fit 9 Aloft Hotel Investment 173 29 2019 50 Trinity Place Group Average Daily Boutique Hotel Centaur 10 Battery Maritime Properties/ 41 5 2020 Room Rate in Building Cipriani

Lower Manhattan, TBD Hotel Roe 12 $284 Q2 2018 11 265 Broadway Corporation 80 (of 42) 2020 TBD Hotel Clarion 12 American Stock Partners/ 174 14 TBD Exchange Building GHC Dev. Hotel Occupancy Total Hotels in the Pipeline 12 Rate in Total Hotel Rooms in the Pipeline 1,901

Lower Manhattan, 1 88% Q2 2018 Source of New York City-wide hotel figures: CBRE Hotels / STR

Lower Manhattan Real Estate Market Overview| Q2 2018 12 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

RESIDENTIAL MARKET

Inventory and Development Continue to Expand LOWER MANHATTAN RESIDENTIAL DEVELOPMENT Source: Downtown Alliance Lower Manhattan has over 31,897 units in 331 mixed-use and Address & Lease & Open Units residential buildings. The estimated population of approximately 61,000 Building Name Building Type Date held steady over the past few quarters as several anticipated openings Rental Units were delayed. Across existing residential buildings, approximately 58 Under Construction TOTAL 1,016 percent are rentals, 35 percent are condos/co-ops and seven percent Rental 1 19 Dutch Street New Construction 483 2018 have an unknown tenure. Over 3,800 units in 22 buildings are either under construction or planned for development (56 percent condo and Rental 2 20 Broad Street Conversion 533 2018 44 percent rental). Condo Units Under Construction TOTAL 2,162 The 2018 pipeline of residential development includes over 1,350 1 19 Park Place Condo 24 2018 units in seven buildings. This past quarter, the Woolworth Residences New Construction at 2 Park Place began closings on the top 30 floors of the Woolworth 49 Chambers 2 Condo 99 2018 Building. Alchemy Properties historic conversion added 34 condo units to Street Conversion the market. Others buildings with anticipated openings this year include: 111 Murray Condo 3 Street New Construction 157 2018 1 Beekman Condo • 19 Dutch Street - Carmel Partners continues construction 4 Street New Construction 31 2018 on a 64-story, 483-rental unit tower. The tower along Fulton 5 30 Warren Street Condo 23 2019 Street will see its first residents moving in this summer and New Construction will continue to open in phases throughout the remainder of 6 161 Maiden Lane Condo 80 2019 the year; 1 Seaport New Construction 125 Greenwich • 19 Park Place - The narrow 21-story, 24 condominium tower, 7 Condo 273 2019 developed by ABN Real Estate, is wrapping up construction Street New Construction and expects a temporary certificate of occupancy later in Condo 8 45 Park Place New Construction 50 2019 2018; Condo • 20 Broad Street - MetroLoft is undertaking the conversion 9 23-31 Park Row New Construction 110 2019 of a 27-story office building adjacent to the New York Stock 69 West 10 Condo 24 2019 Exchange into 533 rental apartments. The building will also Broadway New Construction include 70,000 square feet of retail; 77 Greenwich 11 Street Condo 90 2020 • 111 Murray Street - Fisher Brothers and the Witkoff Group Former Syms site New Construction continue construction on a 62-story, 157-unit condo tower. Condo The building, the site of a former St. John’s University 12 1 Wall Street Conversion 566 2020 building, is expected to be completed in late 2018; 130 William 13 Condo 244 2020 • One Beekman Street - Urban Muse’s 25-story, 31-unit condo Street New Construction tower adjacent to City Hall Park, is anticipating a late 2018 Condo 14 45 Broad Street New Construction 150 2021 completion; and • 49 Chambers Street - The Chetrit Group’s conversion of the 75-83 Nassau Rental/Condo 15 Street New Construction 229 2021 the historic Emigrant Savings Bank will be completed later Condo & Rental Units In this year, adding 99 condo units to the market. Development TOTAL 327 Hotel/Condo Residential Rental Market Metrics 1 267 Broadway New Construction 37 2020 According to residential statistics published by Miller Samuel/Douglas Rental 2 185 Broadway New Construction 279 2021 Elliman, the median rent in Lower Manhattan decreased slightly to $3,795, down 1.5 percent from last quarter, but up five percent from the Rental 3 102 John Street New Construction 92 TBD prior year. Meanwhile, Manhattan’s overall median rent trended down slightly, at 1.8 percent year-over-year to $3,414. TOTAL UNITS IN THE PIPELINE 3,840

Note: Chart displays selected properties. For complete pipeline, please click here.

Lower Manhattan Real Estate Market Overview| Q2 2018 13 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

Residential Sales Market Cools Slightly Continued fluctuation in the residential sales market in Lower Manhattan reflected the expiration of the legacy contract pipeline for condos. Over the last several years, sales at large, super luxury properties like 30 Park Place have skewed overall neighborhood figures. Deals at those properties were signed 2-3 years ago and have since closed. The median sales price for co-ops and condos dropped to just above $1 million, down nearly nine percent from last quarter and 50 percent from the previous year. Similarly, while Lower Manhattan’s average price per square foot (PPSF) of $1,430 saw a slight increase of two percent over the past quarter, the year-over-year decrease was around 39 percent. Sales prices are expected to trend closer to the normal patterns from a few years ago.

LOWER MANHATTAN MEDIAN RESIDENTIAL RENT, 1Q 2015 - 2Q 2018 Source: Miller Samuel/Douglas Elliman

Lower Manhattan condo LOWER MANHATTAN MEDIAN CONDO SALES PRICE, sales are returning to 1Q 2015 - 2Q 2018 normal patterns as the Source: Miller Samuel/Douglas Elliman luxury legacy contracts empty.

Lower Manhattan condo sales are returning to normal patterns as the luxury legacy contracts empty.

Lower Manhattan condo LOWER MANHATTAN AVERAGE SALES PRICE PER sales are returning to SQUARE FOOT (PPSF), 1Q 2015 - 2Q 2018 normal patterns as the Source: Miller Samuel/Douglas Elliman luxury legacy contracts empty.

Lower Manhattan Real Estate Market Overview| Q2 2018 14 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

MAJOR PROJECTS UPDATE

World Trade Center 74 Trinity Place The World Trade Center Transportation Hub Trinity Real Estate’s 74 Trinity Place, a new 26-story, 310,000-square- Three subway entrances opened on the east side of the World Trade foot office building, has begun to rise. The bottom five floors will be Center Transportation Hub in late 2017. The new entrances provide for community use, floors six through eight will be used for Trinity increased access to the World Trade Center E station near Vesey Street Church’s offices and the remaining 17 floors will be rentable office and the Cortlandt Street R/W station from the Oculus and 4 World space. The existing pedestrian bridge across Trinity Place will remain Trade Center. There is now a free connection between the E and R/W and eventually be reconnected to Trinity Church. The $350-million- stations. The Cortlandt Street 1 Train station and an entrance to 3 tower anticipates a 2020 completion. World Trade Center are expected to open by late 2018.

The Ronald O. Perelman Performing Arts Center at the Curious About Ongoing Construction? World Trade Center (The Perelman Center) The Ronald O. Perelman Center for Performing Arts at the World The Downtown Alliance continues to educate our Trade Center, known as the Perelman Center, signed a 99-year constituents about ongoing construction developments lease with the Port Authority in February 2018. The Perelman throughout Lower Manhattan beyond our quarterly real Center has raised $295 million, or 82 percent of its expected $363 estate reports. LM3D gives planners, investors, residents million construction cost. In conjunction with the lease signing, and all neighborhood stakeholders an unparalleled the Port Authority will also receive $48 million from the Lower way to visualize the development taking place in Lower Manhattan Development Corporation for below-grade construction. Manhattan. LM3D’s tools allow users to search for Additionally, the board of directors of the Perelman Center information on an individual building, a select area or to announced the appointment of its first artistic director, Bill Rauch of analyze land use across the neighborhood. the Oregon Shakespeare Festival.

The approximately 110,000-square-foot cube-shaped building will New on our website are a series of development maps feature three theaters of varying sizes, which can be combined in that are divided by geography and include addresses, different seating configurations and formats for an array of unique estimated height, potential uses and expected performance environments. The Perelman Center will be located at completion date for individual projects. These maps the intersection of Greenwich and Vesey streets. The project began also highlight ongoing public construction projects. They construction in fall 2017 and anticipates opening for the 2021 include (links below): season. • Fulton Street area • Greenwich Street South area The Ronald O. Perelman Performing Arts • New York Stock Exchange area Center at the World Trade Center • World Trade Center & Greenwich Street North area (The Perelman Center)

Lower Manhattan Real Estate Market Overview| Q2 2018 15 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL MAJOR PROJECTS UPDATE

3 World Trade Center Opens

Silverstein Properties officially opened 3 World Trade Center on June 11, 2018. The 80-story, 2.5 million-square-foot office tower is now New York City’s fifth-tallest tower. The office tower was designed by Pritzker prize-winning architecture firm Rogers Stirk Harbour + Partners.

Approximately 38 percent of the tower has been leased to date. Anchor tenant GroupM began moving into its 690,000-square-foot space in July. IEX, a stock exchange and technology start up, announced it will move from a 13,000-square-foot space at 4 World Trade Center to a 45,000-square- foot space at 3 World Trade Center at the end of 2018. Management consulting firm McKinsey & Company announced that it will be relocating from Midtown East to a 184,389-square-foot space in 2019. These three tenants will bring approximately 6,000 new employees to Lower Manhattan.

Retail at the base of the tower expects to open next year. Westfield will soon gain access to 75,000 square feet of retail space and anticipates opening as many as six eateries and bars. Direct

Courtesy of Silverstein Properties, Inc. access will be available from the building directly into the Transportation Hub’s subway and PATH connections, and Westfield’s underground shopping concourses by late 2018.

In addition to the office tower opening, public open space surrounding 3 World Trade Center was also unveiled. The plaza just south of the Oculus (north of 3 WTC) and Cortlandt Way (between 3 WTC and 4 WTC) became available for pedestrian use. Additionally, the future site of was enlivened as eight artists created murals on temporary building sheds.

Photo by Jeenah Moon for the New York Times

Lower Manhattan Real Estate Market Overview| Q2 2018 16 Visit www.downtownny.com/research-statistics for additional publications on the Lower Manhattan real

estate market and economy. Documents include a complete list of residential and hotel developments,

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

Lower Manhattan Real Estate 2017 Year in Review, an annual real estate report providing a review of commercial office, retail, residential, hospitality and development projects happening in 2017.

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

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

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

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

Surging Ahead: Lower Manhattan’s Economic Revival and What It Means For New York, a report on the major advances in Lower Manhattan’s economy expected over the next five years as a result of post-September 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, an updated report on how the region’s shifting demographics continue to favor the Lower Manhattan Business District. Previously released in 2012, the 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 changes in use;

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

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