Five Reasons You Should Be Downtown
When Tara Stacom took the agency assignment for One World Trade Center in 2007, she was confident Downtown would become the city’s newest pulse point. “People looked at me like I had four eyes,” she says. It's now the hottest place to be and why we're excited to hold our 4th annual Future of Downtown Manhattan event Dec. 17 at 150 Broadway. Some of our panelists tell us why:
1) You'll Have Really Hip Neighbors
Lower Manhattan is having its strongest leasing year since 1999. “No one expected it to recover as quickly as it did,” says Tara (above), executive vice chairman for Cushman & Wakefield (and a Bisnow 2014 NYC Power Woman). More than 6.3M SF has been signed there in 2014, she says, with a few hundred thousand SF to close by year’s end. Vacancy has also fallen two percentage points from last year, settling at 10%. Thank TAMI tenants. “People think they just want brick-and-beam buildings, but many of them are looking for greater efficiencies. Open, column-free floor plates of new construction deliver that, resulting in lower real estate costs,” she says. Among them: High 5 Games (88k SF) and xAd (44k SF), the latest tenants at One WTC. After our event, Tara will be escaping to the warmer weather of Morocco for the holidays.
CBRE SVP Adam Foster's assignments include repping Brookfield’s One New York Plaza and Silverstein's 2, 3 and 4 World Trade Center. He and his colleagues have closed 1.2M SF at these properties this year, with a majority of the tenants relocating from outside Downtown. Why? Quality space at more affordable prices and a 24/7, thriving neighborhood—they include household names like Revlon, MacMillian, Davis Brody Bond and Group M. While TAMI has repped a good chunk of these deals, he expects an uptick by high-end financial and law firms in 2015. And prices will go up too, he predicts—average rental rates are $51/SF, 10% higher than last year. “I won’t be surprised if they go up another 10%.” Downtown isn’t the only thing that excites Adam—he’s looking forward to finally hitting the slopes again in Vail.
2) It's a Shopaholic's Dream
Also broadening Downtown’s appeal are expanded retail options, from Church Street discount (think Century 21) to Brookfield Place luxury (like Burberry, Ferregamo and Hermès), says Brookfield SVP of leasing David Cheikin (second from left, with colleagues Ed Hogan, Sabrina Kanner, CEO Dennis Friedrich and Jerry Larkin at the complex's Hudson Eats in June). He reports that 95% of the Brookfield Place landlord work is done, and the owner has turned over the spaces to the retailers, who'll begin opening their doors this spring. He's also looking forward to the reopening of West Street (where the DOT should finish work this summer), which will reconnect Brookfield Place and the Hudson River waterfront to the rest of the exciting activity happening Downtown. Tara says the market's retail rents are up 30% over last year’s.
3) It's the New Midtown
MHP Real Estate Services hasn’t been in the Downtown office market for over 15 years, but after it sold its interests in 530 Fifth, 1250 Broadway and One Park Avenue, MHP went into contract with its partner, Clarion Partners, to buy 180 Maiden Ln (word on the street is that it'll close next week; MHP declined comment). “It’s where the new NYC will be for the next 10 years,” says CEO Norman Sturner. What enticed the firm back: better transportation, modern technological infrastructure and an overall younger building stock (the 1.2M SF 180 Maiden Ln is 35 years old, relatively young compared to Midtown). “You can’t go into a Midtown building and build the amenities we’re planning there,” he says, including a whole-floor cafeteria, conference center, collaborative space and a fitness center.
4) Owners Embracing Diversification
JLL managing director John Wheeler (a Bisnow Super Broker), whose team leads leasing efforts for Brookfield Place and One Chase Manhattan Plaza, says the buildings represent a huge trend Downtown—owners going beyond the office envelope to provide a rich environment for a variety of tenants. While Brookfield has revamped its retail and harnessed the waterfront, One Chase Manhattan Plaza is focusing on its two and a half acre plaza and unlocking the potential for 200k SF of retail. Brookfield Place has been very successful in its lease-up, signing new commitments with traditional tenants like Bank of New York Mellon and Scotia Bank and more diverse users like Time Inc, Hudson's Bay, The College Board and GfK, he says. The workforce is continuously getting younger and edgier, and Norman says once 180 Maiden Ln closes, MHP will "be on the hunt Downtown again."
5) Transportation Can't Be Beat
Once the Calatrava-designed WTC Transportation Hub (middle right, pictured last month) is open, David says it will be the only place in Manhattan where you can reach Brooklyn, the Bronx, Queens, Penn and Grand Central stations, Port Authority Bus Terminal and New Jersey with a one-seat ride. And its upper portion (aka The Oculus) “will become the next ‘it’ place for everyone to hold their events," says Tara. If you haven't seen it yet, also check out the new Fulton Street Transit Center when you attend our Future of Downtown Manhattan at 150 Broadway on Dec. 17. Great networking starts at 7:30am, with all-star panels at 8:30am. Sign up here!