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By day, Manhattan’s Financial District is a hub of stockbrokers, corporate partners and tourists rushing toward the Charging Bull. But once the last express bus leaves to the outer boroughs and suburbs, the energy and crowds give way to quiet and emptiness. For years, that was the ebb and flow of FiDi.
Following destruction from 9/11 and Superstorm Sandy, developers have revitalized the area, building new residential and retail projects. The southern tip of Manhattan has started to transform into a vibrant, livable and growing neighborhood. The number of residents in Lower Manhattan has grown to over 60,000, triple what it was 15 years ago.
The neighborhood will see 400 residential units come online this year in 50-unit buildings and larger. Developments like 50 Wall St. and 101 Wall St. have led to a boom in residential supply and pricing. Apartment sales prices jumped to over $1.83M in Q2, a 60% increase from Q1 and a 57% upswing in year-over-year numbers from Q2 2016, GFI Realty Services research analyst Justin Fitzsimmons said. Price-per-SF has also risen 20% from Q1 2016 to a record high of $1,600/SF.
Iconic office buildings have had parts of their floor plans converted to residential use. The Woolworth Tower will soon offer 34 condos on its top floors, with a nine-story, $110M penthouse at the building’s pinnacle. At 70 Pine, the Art Deco skyscraper will feature 600 rental units and a restaurant created by Spotted Pig founders Ken Friedman and April Bloomfield.
Luxury apartments are the norm, keeping rental prices high. The average rent in Q2 rose to a record $4,686, a year-over-year increase of approximately 19%, Fitzsimmons said. Rent-per-SF was $64 in Q2, a 3% rise from Q1 and up year-over-year from $56/SF last year. While last quarter the number of units rented in FiDi increased by 32%, in Q2 the number rented decreased 15%.
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The demographic of FiDi leans toward affluent young professionals. More than 30,000 people between the ages of 18 and 44 live south of Chambers Street, where the median household income hovers at $160K. Occupational status has diversified following an influx of companies in media and technology into Lower Manhattan office space. Companies like Condé Nast, Time Inc. and HarperCollins have Downtown offices, and the number of jobs in the financial sector, 78,600 in 2015, decreased from over 151,000 in 2000.
Despite the higher buying power and variety of taste, of the $356M residents spend annually on dining and entertainment, 55% of it transacted outside of the neighborhood.
Developers have started to address this problem with the introduction of high-end retail locations. Brookfield Place, part of the new interconnected tunnel system of stores and nearby transportation within the World Trade Center complex and the former World Financial Center, offers luxury brands like Gucci and Ferragamo. The Westfield World Trade Center Mall has become a destination shopping area, with favorites like Apple, Eataly and Sephora.
In 2015, ground-floor retail rents in the area increased to $326/SF, and as more retail comes online, prices are expected to rise.
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Tourism has also boomed, fueling retail expansion. As of 2015, 23 million tourists have visited the National September 11 Memorial & Museum, and 2.3 million have ridden the high-speed elevators up to the One World Trade Center Observatory. Lower Manhattan hospitality has taken advantage of the increased activity. Temple Court, a Queen Anne-style building formerly used as an office building, has been renamed and reimagined as The Beekman, a 287-room boutique hotel adjoined by a luxury condo tower. At 130 years old, the 51-story building is itself an attraction.
While post-Sandy FiDi has remained less expensive than other Downtown areas, prices are on the rise as real estate in the area grows in value.
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