Report: Pandemic's 'Deep, Troubling' Financial Impact to Downtown

Sign on Staples, 217 Broadway, announces the store's closing next month. Last year, more than 160 retailers on or below Murray Street closed, according to a report by the Downtown Alliance. Photo: Carl Glassman/Tribeca Trib  

The Downtown Alliance has put numbers to what we see around us: the pandemic’s heavy commercial toll on Lower Manhattan. In its report [1] issued this week, “2020: Lower Manhattan Real Estate in Review,” the Alliance provides data behind a year of reversals to Downtown vitality, from Murray Street to the Battery. (Much of Tribeca is not included in the study.) The city’s initial shutdown, as well as the relocation of an estimated 40% of residents, a remote office workforce, and a shattered tourist industry have all given rise to what Alliance president Jessica Lappin calls a “deep and troubling” blow to the district.

“While it’s still too early to say exactly what the lasting effect will be on Lower Manhattan, there are reasons for hope on the horizon,” Lappin noted in a statement. “We’ve seen this neighborhood overcome obstacles time and time again.”

Here are some highlights from the report:

Retail

• More than 160 retailers, from large to small, closed on or below Murray Street in 2020, most after pandemic-related shutdowns. Of those, 42% of the businesses were restaurant/bars; 33% shops; and 25% percent personal or business services.

• Average retail rents along Broadway, from Battery Place to Chambers Street (per a Real Estate Board of New York fall report) was $407 per square foot, largely unchanged from the year before. That made it unique among other prime retail corridors, where average ground-floor retail rents fell from 3% to 22%.

Hotels

• 15 of the 37 hotels in the Downtown Alliance district temporarily closed while three—the Assemblage, 17 John St., AKA Wall Street and W New York Downtown—shuttered permanently.

• Six hotels, with a total of more than 800 rooms, are still expected to open in Lower Manhattan this year.

Office rentals

• Leasing of new commercial office space, at 2.25 million square feet, was down by nearly 70% from 2019. That’s the lowest level since the financial crisis of 2008-2009.

• Nearly a third (31%) of office space is subleased, a 76% increase over 2019. 

Residential

• Median rents dropped to about $3,300, a fall of 18% compared to 2019. That’s the lowest average rent since 2011.

• Two new buildings, with a total 133 condo units, opened in 2020, compared to three new buildings in 2019.

• There was a 21% price drop in the median sales of co-ops and condos. The median apartment price was $1,617,750. 

• Buyers appeared to be looking for bigger spaces last year. Compared to 2019, there was a 20% increase in the square footage of condos and co-ops that were sold.