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Lower Manhattan office leasing hits three-year high

Leasing activity in Lower Manhattan has reached a three-year high, driven by interest from TAMI and public sector tenants.

According to the Alliance for Downtown New York’s second quarter real estate market report, leasing activity in the area grew by 51 percent year-on-year to 1.2 million s/f, outpacing all other Manhattan markets.

The growth was driven by the TAMI and government sectors, which accounted for 51 percent of Lower Manhattan leases during the second quarter.

The biggest transaction during the period was the New York City Human Resources Administration’s 193,281 s/f deal at 375 Pearl Street.  Meanwhile, four transactions involving TAMI tenants were included in the neighborhood’s list of ten biggest leases. These include Spotify’s 103,020 s/f expansion at 4 World Trade Center, Business Insider’s 88,050 s/f lease at 1 Liberty Plaza, Sailthru’s 27,350 s/f deal at One World Trade Center and Broadway Technology’s 25,110 s/f lease at 28 Liberty Street.

According to the report, there are currently around 50 media companies in the area. This includes news outlets such as Time and the Associated Press, websites such as Vox and Refinery 29 and publisher Harper Collins. The neighborhood’s roster of publishers recently expanded with Macmillan’s 261,000 s/f lease at 120 Broadway.

For the first half of the year, leasing activity in Lower Manhattan nearly matched full-year figures from 2016. During the first six months of the year, Downtown generated 3.07 million s/f in leases, just short of the 3.36 million for the whole of 2016.

Lower Manhattan was the only Manhattan market to register a year-on-year decline in vacancy rate. During the quarter, he vacancy rate in the neighborhood dropped to 8.9 percent, the lowest since 2013. This was driven by a drop in the vacancy rate for Class A offices. The vacancy rate in the segment dropped to 10.3 percent, 2.3 percent percentage points lower than at the end of 2016.

“Lower Manhattan is a picture of progress. We had another great quarter with staggering growth in the presence of tech and creative companies,” said Downtown Alliance President Jessica Lappin. “From long-standing tenants who are recommitting, to new companies who are diversifying the neighborhood’s economy, it’s evident that Lower Manhattan has become the place to be.”

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