St. and New York Internet Co. at 100
William St. have all chosen Lower
Manhattan as their place to do business.
Even ALM, parent company of Real
Estate Forum, is located in the Equitable
Building at 120 Broadway. And while many
data centers relocated to suburban New
Jersey after 9/11 to provide backup for
company data, Seattle-based REIT Sabey
Data Center purchased the old Verizon
tower at 375 Pearl St. for $120 million to
create a million-square-foot multi-tenant
data center here.
“Clearly Downtown Manhattan is no longer just a financial services location. That
has been happening for a number of years,
and now we are seeing that come to fruition
as time has moved on from 10 years ago,”
said Jeff Cushman, executive managing
director at Cushman & Wakefield, in an
exclusive video interview with GlobeSt.com
(
http://www.globest.com/leaders_series).
The Lower Manhattan office market is
also becoming more competitive with
Midtown. Average asking rents start in the
low-to-mid $40s, while space in new buildings can inch closer to $50 to $65 per
square foot.
And as new class A office space comes
on line at the World Trade Center and
World Financial Center, retail is emerging
as one of the area’s biggest new property
sectors. According to REBNY’s “New York’s
Real Estate Market: A Decade After 9/11”
report, asking rent for retail in Lower
Manhattan averages $100 per square foot,
an increase of 66.7% since 2001.
Leading the charge is a $1.2-billion
joint venture between the Port Authority
and Sydney, Australia-based Westfield
Properties for the retail portion of the
new World Trade Center site. The JV will
develop and lease about 455,000 square
feet of retail at two towers. Sources indicated to GlobeSt.com in July that the
retail portion could be leased at hundreds of dollars per square foot. The deal
includes 365,000 square feet at the first
planned tower, to open in 2015, with
another 90,000 square feet at Silverstein’s
2 World Trade Center.
In addition, Brookfield Office
Properties rolled out a $250-million retail
redevelopment plan for the World
Financial Center, which will include
upscale fashion tenants, a European-style
marketplace and new waterfront dining.
Totaling approximately 200,000 square
feet of retail and public space, the prop-
erty will be crowned by a new glass pavil-
ion at West Street, where up to three
anchor retail spaces will be created
directly across from the 9/11 Memorial.
The site’s iconic Winter Garden will also
be renovated to include 90,000 square
feet of in-line international fashion retail-
ers and up-and-coming New York brands.
Downtown’s growing retail population is attracting many to the area, including a 22,000-square-foot Duane
Reade at 40 Wall St. that opened this summer. It features a sushi bar, a beauty boutique and a walk-in clinic.
made by Condé Nast and other compa-
nies, I see how it’s changing almost daily
here,” Mitch Rudin, president and CEO of
BOP’s US commercial property holdings,
told GlobeSt.com in an exclusive inter-
view. This year, Rudin decamped from his
21-year stint with CBRE to be a part of the
neighborhood’s transformation. “It’s not
just the Financial District anymore; it’s
entertainment, it’s the publishing indus-
try, it’s the legal industry. In prior cycles,
you had to create this huge economic dif-
ferential for tenants. Now tenants are com-
ing because they want to be here.”
As a result, supermarkets, restaurants,
retail stores and schools are becoming
more ubiquitous, according to Cushman
& Wakefield’s “Downtown Manhattan: A
Decade of Development” report. A new
23,000-square-foot Duane Reade has
opened at 95 Wall St., and a 32,000-square-
foot TJ Maxx moved into 14 Wall St.
Plans are also under way to expand
Century 21, a Downtown staple across
from the World Trade Center site, to
meet growing demand.
clothing store Joseph A. Bank at 111
Broadway, and they are doing very well. The
energy occurring down there has a lot to do
with the World Trade Center.”
Schuster explains that much of that
enthusiasm is linked to Condé Nast, which
helped aid the transformation of Times
Square from a blighted area to a high-class
destination. “They will do the same down
here,” he says. “The next onslaught of
retail for their demographic is going to be
very helpful.”
In addition to retail, a boost in the tour-
ism market has also helped the Lower
Manhattan market post-9/11. According to
REBNY, New York City has continued to see
an increase in visitors each year and, in
tandem, the retail market has reaped the
benefits. Tourists—both domestic and
international—spent $31.5 billion in 2010.
This trend should bode well for the
Downtown hotel market, which has 25
hotels with 4,948 rooms, says the Downtown
Alliance. Current projects under way
include the 463-unit Conrad New York and
a Four Seasons Hotel at 99 Church St.
