In keeping with the theme of this week’s issue, let’s revisit the Downtown migration trend as tenants now have access to the World Trade Center transportation hub that opened earlier this year. Although this trend had its strongest years in 2013 and 2014 when the tenants that relocated into Lower Manhattan leased over 3.8 million square feet, companies are on pace to relocate into 1 million square feet this year.
Since January 2012, 364 tenants relocated into Lower Manhattan totaling over 9.4 million square feet of leasing activity. Although tenants moved from different areas throughout the New York City metro area, 49.5 percent came from Midtown South followed closely by 44 percent from Midtown. The larger tenants came from Midtown, and they accounted for just under 5.4 million square feet of the Downtown migration leasing activity, while Midtown South tenants moved into over 3.3 million square feet of space. Tenants migrating from outside New York City were a distant third, as 12 tenants moved into Lower Manhattan to occupy over 281,000 square feet.
The TAMI sector (technology, advertising, media and information services) has led all industries in this migration trend since 2012 and accounted for 40 percent of the square footage leased Downtown, with more than 3.7 million square feet of activity. The public sector—made up of government, education and nonprofit tenants—accounted for 20.4 percent of the relocations which totaled over 1.9 million square feet. This sector was even busier this year, accounting for 36 percent of the square footage migrated into compared to 36.7 percent for TAMI. The professional services sector rounds out the top three since 2012, with 12.4 percent of the leasing activity totaling 1.2 million square feet.
From a submarket standpoint, Financial East benefited the most with 196 tenants migrating into the area totaling over 3.4 million square feet—36.4 percent of the square footage leased. The World Trade submarket only had 32 tenants relocate into the area since 2012, but these tenants still accounted for 28.6 percent of the activity and leased 2.7 million square feet. World Trade led the other four submarkets as the average lease size totaled 84,150 square feet—59.8 percent larger than the next highest submarket average in the Financial West submarket.