New Report Offers Mixed Picture of Lower Manhattan's Pandemic Recovery

Empty storefronts like this one, the former William Barthman Jeweler (now on Broad Street) are all too common on Broadway. Photo: Carl Glassman/Tribeca Trib

Every three months the Downtown Alliance takes the commercial temperature of Lower Manhattan, and its latest report finds some encouraging—but hardly certain—signs of recovery.

The Alliance’s newly released Lower Manhattan Real Estate Market Report [1] for January through March puts numbers behind the vital signs of Downtown’s pandemic pummeled economic health. “The economic impacts of COVID-19 are deep and real but we are starting to see a gradual reawakening of Lower Manhattan,” Alliance president Jessica Lappin said in a statement.

Later, speaking to local reporters on May 6, she added that in the last couple of weeks, “My feeling is the neighborhood is picking up a little bit, and hoping that it turns the corner this summer with more people coming to work and more people coming to visit.”

Here are some takeaways from the report, which covers Lower Manhattan, south from Murray Street.

Residents are coming back home

The daily residential population has rebounded to 85% of pre-pandemic levels, up from a low of 66% last June. 

Hotels: "If they survive, maybe they'll do well."

Three Lower Manhattan hotels have closed permanently and of the remaining 36, 27 are open while the other nine are “on hiatus,” some perhaps indefinitely. In the meantime, 12 hotels with a total of nearly 2,000 rooms are in development.

“Clearly business travel, which is a big boon to a lot of our hotels, Monday through Friday, fell off the cliff,” Lappin said. “And tri-state tourists who come over the summer may or may not stay at a hotel. So I’m concerned about that in the shorter term. Longer term, if they can survive maybe they’ll do well.”

Lappin cast doubt on the view by some that failed hotels can be converted into affordable housing, due to building code requirements. And office buildings, she said, also offer challenges. “Realistically, there probably are not that many commercial buildings that can be converted due to the way they’re designed, their floorsplates, their windows, and because they’re not fully vacant or because they have tenants on rolling leases.”

"Sluggish" office leasing

New leasing of office space (449,000 square feet) picked up some but was still “sluggish,” according to the report, which notes that commercial leases for the last three months are 61% below the quarterly average for the past five years. Instead, most signed leases were for renewals, or from one Downtown space to another. 

Stores close, but some open

Since the beginning of the year, 26 retailers, including Staples and New York Sports Club at 217 Broadway, and Invicta, Samsonite, Designer Eyes and Dior Cosmetics at Westfield World Trade Center (the Oculus), have closed. The Alliance counts 13 retailers opening in recent months, including four at Westfield World Trade Center 

Returning workers offer hope

“I’m happy to see the mayor at least is bringing city workers back to the neighborhood, 80,000 this week,” Lappin said on May 6. In addition (and not part of the report), JPMorgan Chase and Goldman Sachs are among the big Downtown financial institutions that expect to bring many workers back to the office by the summer. Citi, whose workforce at its Greenwich Street headquarters is lifeblood to many Tribeca businesses, will be bringing more employees back to their desks in the summer and anticipates a 30% return in July, Sarah Wachler, Citi’s Global Head of Human Resources, said in a statement. A Citi spokeswoman declined to say how many workers are currently coming to the office.

Apartment rents, lowest in a decade

The median rent in Lower Manhattan is $3,000 a month, the lowest in more than 10 years and 22.5% lower than the beginning of 2020. “Relatively more affordable rents should be considered a positive note for Lower Manhattan,” the report says, “particularly as employers begin to return to work and new legions of young professionals start jobs in the City.”