Although the saying goes, “March comes in like a lion, out like a lamb,” Downtown has done the opposite this year. After being dormant last year, Downtown has roared like a lion in 2017 and made both Midtown and Midtown South look like lambs with its strong leasing activity and a significant drop in vacancy.
With 1.7 million square feet of new leases signed Downtown in the first two months of the year, activity is 127.7 percent higher than it was one year ago. The combined monthly new leasing for January and February is the highest total on record for Lower Manhattan and is 20.1 percent above the previous high set in 2013. Compared to 2016, it took more than five months to reach 1.7 million square feet of new leases. Add in the 531,742 square feet of lease renewals signed this year, and total leasing activity reaches over 2.2 million square feet, more than double this time last year.
Total leasing activity was fueled by five leases greater than 100,000 square feet signed—four new leases and one renewal. In addition, four new leases were signed between 50,000 and 100,000 square feet. This brings the total of new leases signed greater than 50,000 square feet in the first two months of 2017 to only one lease short of 2016’s annual number.
The historically high leasing velocity has pushed the Downtown vacancy rate down to 9 percent, a 120-basis-point drop in the first two months of 2017. The World Trade Center submarket has benefited the most from the leasing uptick, as five new leases greater than 50,000 square feet were signed. This caused a significant decrease in World Trade’s vacancy—330 basis points to 10.7 percent.
But Downtown’s leasing velocity won’t end the month of March “like a lamb”: There are four leases pending for nearly 1.4 million square feet on the horizon, which will allow the submarket to continue to strut like a lion.