Development Brisk Across Multiple Sectors in Lower Manhattan
Hotel room inventory in Lower Manhattan is expected to increase 27% in the next few years and if all projects in the pipeline move on to development, the hotel inventory in Lower Manhattan will reach 9,019 rooms in 45 hotels by 2020.
NEW YORK CITY—While residential and overall property sales slowed in the third quarter in Lower Manhattan, the development pipeline in the multifamily, condo and hotel construction sectors continue to bring new product to the area.
The latest data from the third quarter Lower Manhattan Real Estate Market Report released this week by the Alliance for Downtown New York indicates that the sales market for office, hotel, retail and multifamily properties was subdued in Lower Manhattan.
Some of the more notable transactions to close during the quarter included the purchase of the land underneath 101 Barclay by the Bank of New York Mellon from the City of New York for $352 million.
In the hotel sector, Urban Commons of Los Angeles, acquired the 298-room Wagner Hotel at 2-10 West St. for $147.3 million. The report also noted that the pending $6.8-billion Brookfield Asset Management purchase of Forest City Realty includes the trade of the 903-unit 8 Spruce St. luxury rental tower completed in 2012. The deal estimates the value of the building at $520 million or about $576,000 per unit.
Some of the report’s key data points clearly show the significant growth on the horizon in Lower Manhattan in multiple sectors. For example, with the recent opening of Pier 17 in the Seaport District and a host of new retail openings in the district, the Alliance for Downtown New York projects that by the end of 2019, Lower Manhattan will have more than 7.28 million square feet of retail space—an expansion of nearly 3 million square feet since 2014.
In the hospitality industry, record tourist activity in 2017 in New York City, including an 8% increase in tourism visits in 2017 as compared to a year earlier in Lower Manhattan, is fueling hotel development activity.
At the end of the third quarter, there were 7,188 rooms in 33 hotels throughout Lower Manhattan. Three hotels—the 271 room AC Hotel New York Downtown at 151 Maiden Lane; the Moxy NYC Downtown, a 298-room hotel at 26 Ann St. and the 89-room Artezen Hotel at 24 John St.—are expected to open by the end of this year.
The alliance report notes that a total of 12 hotels and 1,901 hotel rooms are currently under construction or in the development pipeline in Lower Manhattan. Hotel room inventory in Lower Manhattan is expected to increase 27% in the next few years and if all projects in the pipeline move on to development, the hotel inventory in Lower Manhattan will reach 9,019 rooms in 45 hotels by 2020.
The residential development pipeline in Lower Manhattan currently features 20 buildings that are either planned or under construction totaling 2,675 units (75% condo, 25% rental).
In the third quarter, three properties totaling 1,173 units opened their doors, including:
• 111 Murray St.—the 62-story, 157-unit condo building developed by Fisher Brothers and the Witkoff Group at the former St. John’s University building;
• 19 Dutch St.—Construction is nearing completion on the 64-story, 483-unit tower. The first residents took occupancy at the building this summer;
• 20 Broad St.—Metroloft’s conversion of the 27-story office building continues. The first residents took occupancy of their units in September. When completed, the high-rise will feature 364 rental apartments, 169 short-term rentals operated by Sonder, and 70,000 square feet of retail space.
Two buildings currently under construction in Lower Manhattan are expected to open to residents before the end of this year:
• 19 Park Place—the narrow 21-story, 24-unit condo tower being developed by ABN Real Estate is expecting to secure a temporary certificate of occupancy in late 2018.
• 49 Chambers St.—Chetrit Group’s conversion of the storied Emigrant Savings Bank building will add 99 condo units to the Lower Manhattan market.