Report: Office Market Slump Deepens. Apartment Rents Near All-Time High.

Downtown office vacancy rates were lower in Class A buildings. Still, the Downtown Alliance reports, "among the [Manhattan] submarkets, Lower Manhattan had the highest Class A vacancy rate (23.7%), followed by Midtown South (21.8%) and Midtown (20.9%). Photo: Carl Glassman/Tribeca Trib

“The worst performance in memory” is how the Downtown Alliance summed up the Lower Manhattan office market for 2024.

In its “Year in Review” report on the status of real estate below Murray Street, the Alliance said that new office leasing fell 21% over 2023 levels, representing “the lowest yearly totals on record.” Still, thanks to residential conversions, more former office space was leased than was lost—3 million square feet more.

“Lower Manhattan’s office market continues to face some real challenges,” Downtown Alliance president Jessica Lappin said in a statement. “However, it is worth celebrating the gains made by our tourism and hospitality sectors, which remain a bright spot.”

Sixty-five retail establishments—largely food and beverage—opened in 2024 compared to 25 that closed. 

And the tourists keep coming. The hotel occupancy rate for Downtown hotels reached 88%, with a fourth quarter that equaled the same period as the year before. Both were the highest on record, the Alliance said. The average room rate hit a record $363.16.

Following are other highlights from the “2024 Lower Manhattan Real Estate Year in Review.” The entire report can be viewed here [1]. 

• Only six office tenants relocated to Lower Manhattan, a 57% decrease from 2023.

• More people are returning to the office, according to an Alliance analysis of data on workers showing up on Wednesdays: 76% of pre-pandemic levels vs. 72% for the year before.

• Of the 16 new retailers that opened in the Downtown Alliance district during the fourth quarter, 13 were food and beverage establishments.

• The average asking rent for retail space was $276 per square foot (reflecting only the first half of the year), a 7% decrease from the previous year.

• The median apartment rent below Murray Street was $4,600, near an all-time high.

• Of the 20 residential buildings under construction, about 57% of the more than 8,000 units are planned as rentals; 43% will be condos.

• 64% of the above units are part of office conversions.

• The median condo value, $1.1 million, is down 7.1% from the previous year.

• Among expected openings this year are Printemps, a luxury French department store at One Wall Street; Socceroof, an indoor soccer facility at 28 Liberty St.;  and Brooks Brothers at 195 Broadway. Wintertime concerts atop Pier 17 roof will be coming with the addition of a glass roof.