Leasing Downtown Looks Up

NEW YORK CITY-In announcing Thursday’s agreement with Silverstein Properties Inc. on a development plan for SPI’s three World Trade Center towers, the Port Authority of New York and New Jersey noted that the deal followed other recent milestones at Ground Zero. They include a joint venture with the Durst Organization in which Durst will take a minority stake in the Port’s 1 World Trade Center, continued progress on building the 1,776-foot tower and a letter of intent by Conde Nast to lease one million square feet there. Looking out beyond the WTC redevelopment site, the Alliance for Downtown New York would point to other positive signs in Lower Manhattan, including a surge in office leasing.

“Downtown had a blockbuster month of leasing” in July, says the most recent MarketView Downtown Manhattan Snapshot from CB Richard Ellis. The 620,000 square feet leased during July topped the five-year monthly average by 63%, the first time in 11 months that this occurred, according to CBRE.

A major portion of the submarket’s July tally came from a single deal: the 171,988-square-foot lease signed by Healthfirst at the largely vacant 100 Church St. It was the first office tenant that SL Green Realty Corp., which foreclosed on and then acquired 100 Church earlier this year, had signed since launching a repositioning campaign at the 1.1-million-square-foot tower. Even without the Healthfirst lease, though, Downtown’s leasing tally for July would still exceed the historical average for the month, CBRE says.

The Downtown Alliance cites the CBRE report as corroboration of its own second-quarter report, issued last month, which said year-to-date office leasing in Lower Manhattan was 28% ahead of the first six months of 2009. As of the end of July, YTD volume Downtown is slightly more than two million square feet, according to CBRE.

The Healthfirst lease is not the only sizeable transaction to have been finalized Downtown recently. Other major deals signed in Lower Manhattan in the past few months included law firm Kenyon & Kenyon’s 199,240-square-foot renewal at 1 Broadway, Nomura Securities International’s expansion into 123,969 square feet at 3 World Financial Center, the New York Liquidation Bureau’s relocation to 116,500 square feet at 110 William St. and the announcement that the New York Daily News would move from Midtown into a 99,050-square-foot space at 4 New York Plaza.

In its report, the Downtown Alliance also cites Deloitte’s pending move into at least 400,000 square feet at 4 World Financial, among about 800,000 square feet of leases either signed or pending early in this quarter. A Deloitte spokesman tells GlobeSt.com that the 4 WFC deal is still in the talking stages.

“These new and pending leases demonstrate that Lower Manhattan’s major tenants remain committed to the area while creative services firms are increasingly drawn to it,” says Elizabeth Berger, president of the Downtown Alliance, in a statement. “The district has a tradition of recovering from adversity with remarkable speed, and we are pleased that every major project at the World Trade Center site is under construction and moving ahead. I fully expect that both public and private investment in our district will continue for years to come.”