Change is constant in New York and retail is no exception. Perhaps there’s no better example of a changing retail landscape than Lower Manhattan. Once considered a business address and little else, Lower Manhattan has become a desirable place to live, work and visit. The residential population has exploded over the last 10 years, tourist volumes are way up, and the number of hotel rooms available and in the development pipeline has grown dramatically. Add to these changes an ever-diversifying employment base and you have all of the ingredients for a vibrant, growing 24/7 environment ripe for a retail renaissance.
Our just-released Business Brief “Retail Revival: The Rebirth of Retail in Lower Manhattan,” takes a closer look at what’s happening in this part of the city and what further changes are in the pipeline.
Here are just a few highlights:
- Population Explosion – Lower Manhattan’s population has increased 51.3% since 2000 and is expected to grow another 9.0% over the next five years.
- Increasing Affluence – Lower Manhattan households are increasingly affluent, with an average annual household income of $158,800 compared to $117,400 for Manhattan overall.
- Increasing Desirability – Along with the growing residential base, the desirability of Lower Manhattan and Downtown as a business location has increased, particularly for creative companies in the media, advertising and technology sectors whose targeted work force lives closer to Downtown than to Midtown.
- Growing Tourism – Lower Manhattan now attracts nearly 12.0 million tourists each year, with 15.0 million annually expected within the next three years.
- Booming Retail Sales – Over the next five years, retail sales in Lower Manhattan are expected to grow by 14.3% to $2.4 billion, nearly double the rate of 8.0% growth forecasted for Manhattan overall.
- Responsive Retailers – To meet growing demand, businesses are flocking to the area. It is estimated that there are roughly 975 small businesses in Lower Manhattan, and since 2012 some 73 retailers have opened new establishments in the area.
- Diversifying Retail Offerings – Lower Manhattan’s growing stable of retail offerings include grocery stores, bars, restaurants, luxury brands, fitness clubs, and gyms.
- Healthy Retail Supply Characteristics – Lower Manhattan’s retail vacancy rate of 10.2% is comparable to popular Midtown submarkets.
- Growing Retail Rents – Lower Manhattan’s average asking retail rent of $277 per square foot is a 29.4% increase over the past year, which ranked the area fourth among all Manhattan retail submarkets in annual rental rate growth.
- New Retail Projects Abound – It is estimated that approximately 970,000 square feet of new, renovated and re-purposed retail space is currently being marketed in Lower Manhattan.
These transformational changes in the Lower Manhattan market are significant and represent an historic shift in the local retail landscape. More importantly, they provide mounting evidence of a sustainable retail renaissance.