Lower Manhattan Real Estate Market Overview, Q2 2022

Q2 2023 LOWER MANHATTAN REAL

ESTATE MARKET REPORT

LOWER MANHATTAN REAL ESTATE MARKET REPORT

Lower Manhattan’s office market continued to show mixed indicators in the second quarter. Government leasing helped increase office market activity from the beginning of the year, but vacancy rates remain stubbornly high, particularly in Class B properties. The district’s ongoing challenges are mirrored across all Manhattan submarkets as the city’s office market navigates continued macroeconomic uncertainty. Though office leasing is still trying to find its footing, other sectors of Lower Manhattan’s economy continue to recover. Median apartment rents are still high as Lower Manhattan remains a residential neighborhood of choice. The hospitality industry has reason for optimism, with new hotels under construction, increased travel and positive momentum in both hotel occupancy and room rates. Twenty-one retailers have opened in the spring, up from rates seen at the beginning of the year, and another 10 recently announced plans for new storefronts in Lower Manhattan.

Large Government Deal Propels Leasing Activity

Lower Manhattan recorded 1.13 million sq. ft. of office leasing according to CBRE — more than double the activity recorded in the first quarter and the highest quarterly total since the beginning of the pandemic. Leasing activity grew an enormous 126% from the previous quarter and finished 13% above the five-year quarterly average. Lower Manhattan’s leasing activity in the second quarter was driven by the NYC Administration for Children’s Services’ 641,000 sq. ft. lease at 110 William Street. Activity in the rest of the market remained sluggish and high vacancies have persisted across asset classes in the district.

Midtown saw 2.53 million sq. ft. of leasing activity in the second quarter, roughly on par with the previous quarter, but 27% behind the five-year quarterly average.

Lower Manhattan Annual New Leasing Activity, 2017-2023

1,130,000 Square Feet Of New Leasing In The Second Quarter — 13% Above The FiveYear Quarterly Average

Source: CBRE

This is the third consecutive quarter below 3 million sq. ft., as leasing activity in the Grand Central, Penn District and Times Square submarkets lagged well below their five-year quarterly averages. Midtown South recorded 729,000 sq. ft. of leasing in the second quarter — down 12% from the first quarter and 38% below the five-year quarterly average. Technology tenants, who drove an outsize share of leasing in Midtown South in recent years, pulled back sharply in the second quarter as fallout from the banking crisis earlier in the year suppressed activity. Leasing in Midtown South has now fallen below the five-year quarterly average for four consecutive quarters.

Downtown Leasing Activity Improves

Moves within Lower Manhattan accounted for 687,000 sq. ft. of second quarter leasing — nearly two-thirds of the quarterly total. This increase was driven by a single government tenant deal: the NYC Administration for Children’s Services (ACS) signed a 20-year lease for 640,000 sq. ft. at 110 William Street, relocating within Lower Manhattan and expanding from its current 434,000 sq. ft footprint at 150 William Street. ACS’ deal brings 110 William Street to nearly 100% leased and surpasses Lower Manhattan’s entire first quarter leasing total of 500,000 sq. ft. Other notable tenants to move within the district include Curtis Ginsberg Architects, which relocated and expanded from its 10,307 sq. ft. offices at 55 Broad Street to a 12,602 sq. ft. space at 1 Battery Park Plaza; Carnegie Mellon University, which also relocated from 55 Broad Street to a 12,014 sq. ft. space at 88 Pine Street; and Tomorrow Health, which moved from 225 Broadway to a 11,487 sq. ft. space at 217 Broadway.

Recommitments to Lower Manhattan also accounted for a sizable share of second quarter leasing: in the World Trade submarket, the Bank of Nova Scotia (Scotiabank) renewed its 131,048 sq. ft. lease at 250 Vesey Street, the Municipal Credit Union of New York renewed its 93,500 sq. ft. lease at 22 Cortlandt Street, and Scale Facilitation, an Australia-based professional services firm, took an additional 34,382 sq. ft. to house its Access New York tech startup incubator program after moving into a 36,099 sq. ft. space last year. Along the Water St. corridor, the Legal Aid Society extended its 72,091 sq. ft. lease at 199 Water Street and engineering firm Walter P. Moore expanded its footprint to 11,719 sq. ft. at 180 Maiden Lane. Finally, flexible office provider Regus renewed its 37,031 sq. ft. lease at 14 Wall Street.

Lower Manhattan Top Leases, Q2 2023

Source: Downtown Alliance, CBRE, Colliers, Newmark Knight Frank, CoStar

Relocation activity, historically a large driver of Lower Manhattan leasing, was fairly muted in the second quarter. Only three firms inked deals to move to Lower Manhattan, all relocating from Midtown: The Levin Group, an HR recruiting platform, signed a 13,000 sq. ft. lease at One World Trade Center, relocating from 500 7th Avenue; PowerFlex, a solar energy company, signed a 11,163 sq. ft. lease at 75 Broad Street, relocating from 805 3rd Avenue; and Kain Capital LLC signed a 4,700 sq. ft. lease at One World Trade Center, relocating from 360 Madison Avenue.

Other notable tenants to commit to Lower Manhattan include The Messenger, a newly-formed digital media company, which signed a 41,854 sq. ft. lease at 195 Broadway, taking sublet space from Orchard Technologies; CFC USA Holdings, a UK-based boutique insurance firm, which signed a 14,499 sq. ft. lease at 48 Wall Street; and Vernon Capital Group, an investment firm, signed a 14,000 sq. ft. lease at 88 Pine Street.

Vacancy Rates Remain High Across Manhattan

According to Cushman & Wakefield, Lower Manhattan’s overall vacancy rate grew by 1.6% to 24.2% in the second quarter, reaching a new record high and remaining the highest among Manhattan’s office markets. Overall vacancy increased by 2.6% year-over-year, reflecting the continued addition of large blocks of space to the market. Across office-class types in Lower Manhattan, Class A vacancy grew by 1.2% from the previous quarter and 2.5 % from last year to 23.7%, reaching a record high for Class A vacancy both in Lower Manhattan and across Manhattan’s office markets. The class B vacancy rate also grew to a record high of 27.1%, up 2.5% year-over-year.

Even as leasing activity increased in Lower Manhattan, the addition of new direct and sublease spaces outpaced new leasing in the second quarter. Though flight to quality continues to drive much activity in the market, Class A and overall vacancies in the World Trade submarket (consisting of mostly newer buildings in and around Brookfield Place and the World Trade Center campus) increased by 2.3% and 2.8%, respectively, growing to 22.5% and 21.3% as over 346,000 sq. ft. were added to the market in the second quarter. Additionally, Lower Manhattan now contains two submarkets with vacancy rates above 35 percent: the Financial West submarket

(roughly west of Broadway, south of Liberty Street) is now 35.2% vacant. Vacancy rates in the Financial West submarket grew by 1.3% over the past quarter, reaching the highest vacancy among all Manhattan submarkets for the second consecutive quarter. In the Insurance District (roughly east of Broadway, north of Maiden Lane), vacancy rates grew to 35.1%, up 2.3% from the previous quarter.

Stubbornly high vacancy rates have persisted across all the Manhattan office markets. Class A vacancy rates in Midtown South rose for the second consecutive quarter, reaching parity with Lower Manhattan at a historic high of 23.7%. Overall vacancy rates also reached record highs in Midtown South in the second quarter, growing to 23% as several large blocks were added to the market in NoHo/ SoHo, Chelsea, and Hudson Square. Midtown’s overall and Class A vacancy rate dipped over the previous quarter, however, by 40 and 60 bps respectively, as over 650,000 sq. ft. of sublet space was removed from the market. Nonetheless, Midtown Class B vacancy inched up by 30 bps to a historic high of 24.2% amid competition from newly built space at Manhattan West.

Overall Vacancy Rates by Submarket

Source: Cushman & Wakefield

Class A Vacancy Rates by Submarket

Source: Cushman & Wakefield

Class A Asking Rents Grow Modestly

Class A rents rose across Manhattan in the second quarter as large blocks of higher-priced office product became available throughout the borough’s office markets. Lower Manhattan’s overall asking rents, however, decreased slightly while Midtown and Midtown South recorded modest gains, returning to a pattern of bifurcating prices seen last year.

According to Cushman & Wakefield, Lower Manhattan’s overall average asking rent inched down by 10 bps over the previous quarter, and fell by 90 bps to $56.27 per sq. ft. year-over-year. This marks the seventh consecutive quarter below $60. Direct asking rents held flat over the past quarter at $59.64 per sq. ft., though sublet asking rents grew by 1.6% to $49.80 as large blocks became available for sublet at Four and Seven World Trade Center. Class A asking rents inched up by 30 bps over the past quarter to $60.03 per sq. ft., surpassing $60 for the first time in a year, but remain 80 bps lower year-over-year. Class B average asking fell by 1.3% over both the quarter and year to $51.55 amid high vacancy rates and diminished demand.

Overall and Class A office rents in Midtown inched up modestly over the past quarter to $77.05 and $83.95, respectively, as an eleven-floor block of space came onto the market at Two Manhattan West. In Midtown South, overall and Class A asking rents grew by 5.8% and 3.8% respectively year-overyear as higher-priced direct blocks entered the market at 555 Broadway and 376 Hudson Street.

Overall Asking Rents by Submarket

Source: Cushman & Wakefield

Class A Asking Rents by Submarket

Source: Cushman & Wakefield

Second Quarter 2023 Property Sales

Mixed-Use Building Sales

119 South Street: Investor Adam Ibrahim purchased the 14,053 sq. ft., 5-story building at 119 South Street in the Seaport from seller Emilio Barletta for $11.4 million. 119 South Street contains 16 residential units and a commercial space occupied by the Paris Cafe.

Recent Pending Sales Announcements

61 Broadway: RXR Realty entered into default on 61 Broadway after it reportedly stopped making payments on its $240 million loan on the property in December 2022. RXR agreed to return the 787,000 sq. ft. building to lender Aareal Bank in a deed-in-lieu-of-foreclosure transfer. Aareal Bank is seeking to sell the outstanding debt on the building for a tobe-determined amount.

144 Fulton Street: Crown Acquisitions has listed the 5-story, 8,625 sq. ft. retail property at 144 Fulton Street for $44 million. The firm originally acquired the property for $25 million in 2015. The building is fully occupied by Chick-Fil-A, whose lease lasts until January 2038.

Return to Office and Pedestrian Traffic Show Positive Momentum

Lower Manhattan’s sidewalks are increasingly bustling as workers continue returning to offices and pedestrian traffic increases. A Downtown Alliance analysis of Placer. ai data revealed midweek daytime office occupancy rates in Lower Manhattan at an average of 61% of pre-pandemic levels in the second quarter, up 3% from the beginning of the year. Using a representative mix of Class A and Class B properties, including buildings in the World Trade Center complex and Brookfield Place as well as offices in the Water Street Corridor and Financial West submarkets, the analysis showed occupancy rates in Lower Manhattan to be consistently higher than widely reported NYC Metro-wide data would suggest.

In particular, Placer data shows World Trade Center and Brookfield Place midweek occupancy at an average of 74% throughout the second quarter, up 4% from the beginning of the year. Conversely, the largely Class B properties in the Financial West submarket saw occupancy rates at an average of 52% throughout the quarter, up 5% from the beginning of the year but still lagging the district-wide average and well below occupancy rates seen in Class A properties.

Placer data shows occupancy rates across property class types largely mirroring the flight to quality trend, with the strongest return to office seen in newer, well-located and amenity-rich buildings.

Recent pedestrian counts in Lower Manhattan have also increased. By the end of June, foot traffic throughout the spring was up an average of 28% from the end of the first quarter and 12% from the second quarter of 2022. Growing tourism, warmer weather and increased office occupancy, particularly midweek, are driving weekday traffic and contributing to a busier feel on the streets.

RETAIL

Twenty-one retailers opened in the second quarter of 2023, up from the 14 that opened in the first quarter. Nearly two-thirds were food and beverage businesses, including:

• Pearl Korean restaurant in the 33 Seaport Hotel at 33 Peck Slip, replacing Bellini;

• Best Sicily Bottega, a Sicilian cafe featuring imported Italian grocery items, at 67 Wall Street;

• Pearl Alley, a restaurant concept featuring two bars, a coffee bar and two food kiosks, replacing Dante cocktail bar at Pier 17 in the arcade between Momofuku Ssam Bar and The Fulton;

• 7th Street Burger, the popular East Village-based burger joint, at 80 Nassau Street, replacing Badshah Indian;

• Gnoccheria Wall Street Express and BioPoke at 14 Wall Street;

• Ol’ Days, a breakfast and lunch cafe, in the former Mulberry & Vine space at 73 Warren Street;

• Ole & Steen, a Danish bakery at 100 Church Street;

• 100 Marketplace grocery store and hot bar at 100 Broad Street in the former Pranzo space; and

• Birch Coffee at 136 Church Street.

Eight retail stores also opened in the second quarter, including:

• Two new sports and fitness centers: Court 16, a 7,000 sq. ft. tennis and pickleball facility, at 28 Liberty Street and F45 Training group fitness gym, replacing Square Circle New York Muay Thai MMA at 80 Nassau Street;

• Nike by Battery Park at 230 Vesey Street in Brookfield Place;

• Pretty Well Beauty and Maure, a high-end home goods store at Westfield WTC; and

• GameStop at 174 Broadway in the former NY Gifts space.

Additionally, Century 21 reopened its flagship department store at 22 Cortlandt Street in May, in partnership with Legends Hospitality. Century 21 has reduced its footprint to 100,000 sq. ft. over four floors from its previous 200,000 sq. ft.

Looking forward, 10 retailers announced plans in the second quarter to open locations in Lower Manhattan. Among those who announced during the second quarter are:

• SPiN, a ping pong gaming center, announced plans to open later this year in the 5,600 sq. ft. former Bobby Van’s space at 25 Broad Street;

• Peachy, a skincare clinic, at 120 Broadway;

• Tsubame, a new Japanese omakase restaurant, at 11 Park Place;

• a new Springbone Kitchen location at Hudson Eats in Brookfield Place, joining the Coenties Slip outpost that opened in 2019;

• Barcade at 53 Park Place in the 7,500 sq. ft. former Amish Market space;

• Interlude Cafe at 111 Murray Street;

• Los Tacos No. 1 at 20 Broad Street; and

• Starbucks at 155 Water Street in the former Chase space, relocating from the former 135 John Street location.

Sadly, 11 Lower Manhattan retailers closed in the second quarter. Notable closures include:

• Etrusca modern Italian restaurant at 15 South William Street;

• Chinah Kitchen at 100 Maiden Lane;

• Picasso Pizzeria at 375 South End Avenue;

• Sauce & Barrel Pizzeria at 88 Greenwich Street;

• Scotch & Soda at 14 Fulton Street

• Dante cocktail bar at Pier 17 in the Seaport; and

• Hydra Studios, a wellness and fitness spa, at 120 Wall Street.

Finally, Delmonico’s is poised to reopen soon at 56 Beaver Street after closing at the onset of the pandemic.

HOTELS + TOURISM

Tourism Continues to Rebound

Lower Manhattan welcomed 7.4 million tourists in 2022 as domestic travel returned and most remaining international travel restrictions were lifted. Though still far below 2019’s 14 million tourists, 2022’s tourism number was more than double the visitation seen in 2020. The share of international visitors nearly doubled to 55% from 28% in 2021. Following Latin America’s lead in 2021, the bulk of international traveler origination shifted back to traditional western European markets in 2022. Asian tourism continues to lag behind its 2019 levels.

56.7 million visitors came to New York City in 2022, or 85% of 2019 visitation levels, and more than double the 22.3 million in 2020. Looking forward, international travel is expected to steadily increase, and New York City Tourism + Conventions forecasts that domestic travel will exceed prepandemic levels later in 2023.

Occupancy and Average Daily Room Rate Continue Recovery

Citywide hotel occupancy metrics are beginning to approach pre-pandemic levels, and occupancy rebounded sharply from the previous quarter across Manhattan hotel markets. Citywide occupancy levels rose by 11% over the previous year and Lower Manhattan recorded levels 6% higher than in the second quarter of 2022.

At $175 per night, citywide average daily room rates remained 35% below 2019 levels, but grew 9% year-overyear. Meanwhile, Lower Manhattan saw average daily room rates rise 14% higher than in spring 2019 and 7% higher year-over-year at $305 per night, likely spurred by the recent addition of new luxury properties to the neighborhood’s hotel inventory.

$305

Lower Manhattan Hotel Average Daily Room Rate

Hotel Occupancy in Lower Manhattan and New York City

Source: CoStar/STR

Hotel Average Daily Room Rate (ADR) in Lower Manhattan and New York City

Source: CoStar/STR

Lower Manhattan Hotel Development

The current hotel inventory in Lower Manhattan stands at 9,087 rooms across 43 hotels. No new hotels opened in the second quarter.

There are over 940 hotel rooms across five hotels under construction or in development in Lower Manhattan. One new hotel containing 70 rooms is expected to open later in 2023:

• The Warren Street Hotel, a new boutique hotel operated by Firmdale Hotels, is expected to open later this year at 86 Warren Street.

Source: Downtown Alliance

Lower Manhattan Hotel Pipeline

The Warren Street Hotel

Inventory and Development

Lower Manhattan has 34,243 units in 345 residential buildings. There are 5,776 units in 18 buildings under construction or planned for development, with about 87% currently planned as rental units and 22% as condos. In early 2023, construction wrapped one property:

• One Wall Street: Macklowe Properties finalized construction on Macklowe Properties finalized construction on converting the landmarked office tower into 566 condominiums. The building offers 157,000 sq. ft. of retail, including a 44,000-sq.-ft. Whole Foods, 74,000-sq.-ft. Lifetime Fitness and Printemps, a luxury French department store, which spans 54,365 sq. ft. over two levels. Printemps is expected to open in spring 2024.

Later in 2023, one additional residential development is expected to wrap construction and open, bringing another 58 units onto the market:

• 1 Park Row: developed by Circle F Capital, the 100,000 sq. ft. developed by Circle F Capital, the 100,000 sq. ft. development at the corner of Park Row and Ann Street will yield a new 23-story, 58-unit condo tower and feature 13,500 sq. ft. of retail space. This is the last parcel along Park Row left for development after J&R Music and Computer World’s closure in 2014.

Over the next several years, three new developments containing nearly 1,240 new units are expected to finish construction, including:

• 7 Platt Street: Moinian Group is currently building a new 250-unit tower that will also contain a hotel component. 7 Platt Street is expected to finish construction and open in 2025;

• 8 Carlisle Street: North Carolina-based developer

Grubb Properties plans to build a 50-story building containing 22,000 sq. ft. of ground-floor retail and 400 residential units. 8 Carlisle, which is set to receive tax abatements under the recently expired 421a program, will include a mix of affordable and market-rate rental units. 8 Carlisle is expected to finish construction in 2025; and

• 160 Water Street: Vanbarton Group is currently working to convert the 24-story, 482,000 sq. ft. office building into a 586-unit market rate rental building. Construction is scheduled for completion by late 2025.

Finally, in June the New York State Supreme Court issued a ruling allowing development work to continue on Howard Hughes’ 399-unit rental building at 250 Water Street following an injunction issued by a lower court in January. An expected completion date has not yet been announced.

Source: Downtown Alliance

Lower Manhattan Residential Pipeline

Residential Rental Prices Rise

According to residential statistics published by Miller Samuel/Douglas Elliman, the median rent in Lower Manhattan rose by nearly 7% over the previous quarter to $4,500 after cooling slightly at the beginning of the year. Median rents are now nearly 13% higher than before the pandemic, and listing discounts were largely absent in the second quarter as demand spiked during the busy summer leasing season. Available units were leased on average 14 days faster than in the previous quarter, suggesting that rents may continue to rise amid high demand and tight supply.

Median Residential Rental Price

Source: Miller Samuel/Douglas Elliman

130 Liberty Street

Manhattan’s overall median rent also rose to a new record high of $4,300. Manhattan overall median rents were 2% higher than in the previous quarter and nearly 23% higher than pre-pandemic. Manhattan’s overall median rent has now surpassed pre-pandemic rates for six consecutive quarters. Demand and prices appear poised to increase further amid an ongoing supply shortage and competition from would-be homebuyers who have remained in the rental market due to increased interest rates.

The sales market also heated up in the second quarter in Lower Manhattan as median sales prices rebounded after dipping at the beginning of the year. The median sales price for co-ops and condos in Lower Manhattan rose to $1.275 million, up nearly 7% from the first quarter, though 10% lower year-over-year and nearly 39% below the record high seen at the end of 2022. With 121 units sold, sales volume in Lower Manhattan nearly doubled over the previous quarter, driven by sales at One Wall Street and 130 William Street, and finished 6% higher year-over-year.

Across Manhattan median sales prices also rose from the beginning of the year, increasing 11.6% over the quarter to $1.2 million. Sales volumes rose by a modest 3.7% over the quarter, but finished over 39% lower year-over-year as tight inventory and increased rates have limited new transactions.

$4,500

Median Rent in Lower Manhattan — 13% Higher Than Before The Pandemic.

Median Residential Sales Price

Source: Miller Samuel/Douglas Elliman

MAJOR PROJECTS UPDATE

World Trade Center

Ronald O. Perelman Performing Arts Center

Construction on the Ronald O. Perelman Performing Arts Center (PAC NYC) topped out in the spring of 2021. Exterior facade work of the 4,900 marble panels wrapped in early 2022. The approximately 110,000 sq. ft. cubeshaped building will feature three theaters of varying sizes which can be combined in different seating configurations and formats for an array of unique performance environments. The project is anticipated to open in September. View PAC NYC’s opening schedule here.

Site 5

A partnership between Brookfield and Silverstein Properties received approval from the Port Authority and Lower Manhattan Development Corporation (LMDC) to develop Site 5 at the World Trade Center, also known as 130 Liberty Street. The site recently served as a Port Authority police depot and the southernmost area continues to function as a temporary public plaza. The proposed 1.56 million-sq.-ft. tower is expected to include approximately 1,300 rental apartments, of which at least 33% will be affordable. LMDC approved an override to city zoning rules in order to build a tower larger than local regulations allow. Construction may commence later in the year.

Pace University

In December 2022, Pace announced plans to renovate One Pace Plaza, adding new academic spaces, a modernized residence hall and a new performing arts center. The renovation will include the reconstruction of the lower floors of One Pace Plaza East and upgrades to the dormitory building at 182 Broadway. Construction is expected to start in the fall and be completed in early 2026.

Construction continues on Pace’s new 215,000 sq. ft. tower (which will be known as 15 Beekman Street). The tower will house a residence hall, dining facility, library, and academic and classroom spaces. Construction on the new tower began in early 2021, with occupancy planned for fall 2023. The new tower replaces two buildings at 126-132 Nassau Street and 15 Beekman Street that are now demolished.

The new building will serve as a replacement for Pace’s 50-year-old tower at One Pace Plaza East. 15 Beekman Street will be the third property SL Green has built for Pace in the neighborhood. The developer previously built dorm buildings at 33 Beekman Street in 2015 and 180 Broadway in 2013.

Transportation Infrastructure

Broadway Bicycle Lane Fortified

The New York City Department of Transportation is continuing to add concrete barriers to fortify half (20 miles) of the City’s dedicated bike lanes by the end of 2023. In one of the first projects, concrete barriers were installed along Broadway bike lane, between Barclays and Morris Streets.

Street Reconstruction

Reconstruction of Front Street between Old Slip and John Street began in January 2020 and is scheduled for completion in Fall 2023. Greenwich Street reconstruction, between Barclay and Chambers Streets, began in early 2022 and will be completed in November 2024; the adjacent sidewalks at 240 Greenwich Street will also be redone in tandem. Vesey Street reconstruction, between Church Street and Broadway, began in September 2022 and will be completed in September 2024. Nassau Street reconstruction, between Pine Street and Maiden Lane, began in the spring. These projects, each lasting two years, will replace all underground infrastructure, including water mains, sewers, electric, gas and other utilities, as well as construct new streets and curbs.

Water Street Streetscape Improvements

The city began work on the streetscape and public-realm enhancement project along the Water Street corridor in May 2021, which is estimated to be completed in 2024. The $22.8 million project will transform two temporary public plazas at Coenties Slip and Whitehall Street into permanent public spaces featuring new landscaping, seating and concessions. The project will also plant street trees, rebuild sidewalks and enhance pedestrian safety from Whitehall Street to Old Slip.

Parks and Open Space Wagner Park

In July 2022 the Battery Park City Authority (BPCA) closed Wagner Park to begin work on the $221 million South Battery Park City Resiliency Project. Plans for the project call for the demolition and reconstruction of Wagner Park and the Wagner Park Pavillion, ultimately elevating the park by 10 feet and installing flood walls, berms and other resiliency infrastructure from the Museum of Jewish Heritage through Wagner Park and Pier A, moving along Battery Place over to Bowling Green Plaza. Construction resumed in May after the Battery Park City Authority successfully appealed an injunction issued by a state Supreme Court judge in December 2022. Construction is scheduled to be completed in 2025.

Brooklyn Bridge

The Arches, a one-acre park under the Brooklyn Bridge, reopened in May. The Park features basketball, pickleball, and shuffleboard courts, as well as with public seating. The Arches and the adjoining Brooklyn Banks skatepark have been closed to the public since 2010, when the NYC Department of Transportation began using the spaces as a storage area for construction equipment amid maintenance work on the bridge.

Climate Resiliency Resilience Master Plan

Work continues on parts of the Financial District and Seaport Climate Resilience Master Plan, a resilient infrastructure plan released in 2021 to protect Lower Manhattan from future flooding. The master plan is part of the larger Lower Manhattan Coastal Resiliency strategy, with active capital projects in Battery Park City, The Battery and Two Bridges. The plan calls for the creation of a twolevel waterfront park that extends the shoreline of the East River by up to 200 feet.

The upper level will be elevated by 15 to 18 feet to protect against severe storms, while doubling as public open space. The lower level will be a waterfront esplanade raised three to five feet to protect against sea level rise, while offering access to the East River shoreline. The flood defense infrastructure is projected to cost $5 to $7 billion and could be in place by 2035, pending funding and prioritization by regulatory agencies.

Governors Island

New York Climate Exchange

New York City selected a consortium led by Stony Brook University to develop a $700 million, 400,000 sq. ft. climate research and development campus on Governors Island that will be called the New York Climate Exchange. The campus will include two new classroom and research buildings, student and faculty housing, and university hotel rooms. The campus is expected to host 600 college students, 6,000 job trainees and 250 faculty members and researchers. In addition to Stony Brook University, the development consortium includes IBM, University of Oxford, Georgia Institute of Technology, Pace University, Pratt Institute and Boston Consulting Group. Governors Island was rezoned in 2021 to allow for the campus. Construction is expected to begin in 2025 and wrap up in 2028. The Trust for Governors Island announced expanded ferry service running every 15 minutes beginning in summer 2024.

New York Climate Exchange

Alliance for Downtown New York 120 Broadway, Suite 3340 New York, New York 10271

The mission of the Alliance for Downtown New York is to provide service, advocacy, research and information to advance Lower Manhattan as a global model of a 21st century central business district for businesses, residents and visitors.

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