Move over, Midtown; major companies calling workers back to the office are setting up shop south of the Brooklyn Bridge.
Downtown Manhattan has undergone a dramatic transformation over the last generation. Formerly dominated by financial firms during the day and empty streets at night, the neighborhood is now home to a diverse range of businesses, just as many residents as Chelsea and a vibrant nightlife scene. Thanks to its location at the center of NYC’s transportation nexus and its unique historic character, being located on the tip of Manhattan is becoming a key ingredient in many companies’ back-to-office pitches. The downtown workforce is happy to be where they are. According to a survey of office workers conducted by BVA-BDRC 79% of Lower Manhattan workers who have worked elsewhere in the city reported being equally or more satisfied working downtown.
“An incredibly diverse ecosystem”
Lower Manhattan is a role model for the “21st-century, live, work and play community,” competitive both with Midtown and Hudson Yards, says William Rudin, Co-Executive Chairman of Rudin Management.
The neighborhood is home to office space that can accommodate a wide range of institutions, from Class A companies to nonprofits and everything in between.
For firms such as Spotify and McKinsey & Company, relocating to Lower Manhattan has been a lynchpin for attracting employees, says John Wheeler, Executive Managing Director of JLL, the New York-based global commercial real estate and investment management company.
“Downtown has evolved into an incredibly diverse ecosystem,” he says, emphasizing that mass transit flowing through the neighborhood caters to the “high-value talent” companies are targeting.
From a transportation point of view, Lower Manhattan is “a very convenient location,” and not just from Midtown, says Albert An, who runs Tower Research Capital, a trading and financial service firm that combined its two Manhattan locations into one at 120 Broadway this year.
“We’re in the finance and technology industry, which attracts a diverse crowd. Our office location is convenient,” An says. “Many live in Brooklyn, and they can easily get here by subway. Employees from the New Jersey side can easily get here by PATH train. And then we have a lot of employees spread out across Westchester and Long Island. They can take a train to Grand Central and then an express subway that goes straight into the building.”
Live, work, play
In Lower Manhattan, workers who decide to live close by join a community of close to 70,000 residents, a figure equal to Chelsea’s population. The neighborhood’s housing is being fed by a combination of new construction and office-to-residential conversions, with more major openings on the horizon.
“We have over 10 million square feet of office buildings that, post-COVID, have either been converted or are confirmed in the pipeline for conversion,” says Wheeler, pointing out that the New York Stock Exchange is now surrounded by residential units along Wall Street.
Rudin estimates that 30% of those who live in Lower Manhattan can walk to the office.
“That statistic will grow,” he says.
Of course, having a liveable neighborhood is about more than counting the steps from one’s front door to the office. According to Wheeler, open space accounts for about 20% of Downtown Manhattan, compared with Midtown’s 3% of parkland.
With its parks and attractions along the waterfront, Wheeler describes open space as “a very real element of your daily experience working here.”
Downtown is home to a robust restaurant and bar scene, with more hospitality being added every month. Macklowe’s recent office-to-resi conversion 1 Wall Street is a prime example of the neighborhood’s evolution: in addition to its 566 condos, the building’s ground floors are home to a Whole Foods Market and the first American location of French luxury retailer Printemps, which features an exclusive eatery.
The area’s major attractions include the Seaport, the Statue of Liberty and Battery Park, all of which feed more than 40 hotels, including the high-end Casa Cipriani.
“It’s the whole ecosystem that will help enhance the attractiveness of tenants to Lower Manhattan,” Rudin says.
Moreover, Lower Manhattan is a value for those seeking office space. Taking the average prices from all of 2024, Lower Manhattan commercial rents are 41% lower than Midtown and 40% lower than Midtown South.
“A sense of culture, a sense of being”
For An, the provenance of the Beaux-Arts-style building at 120 Broadway, built in 1915, resonated with Tower Research executives in their decision to open the company’s headquarters there.
“One of the things that we talk about being super important for lots of companies is a sense of culture, a sense of being, and a space reflects that,” says An. “It’s a building with some history. I believe it is a building that exudes an old-school quality, rather than just another glass tower with a giant floor plan. We knew that we could create character with this space.”
Tower Research Capital was founded in 1998 in Lower Manhattan, and was previously splitting space between two buildings on Broadway and Lafayette Street. As the company grew into a global player, finding an historic office building that combined character with flexibility became not only an aesthetic choice, but a business necessity.
“We’re a regulated financial institution,” explains An. “We often host guests who could be some of the most powerful regulators in the world, prime brokers, and banks. Our office space now matches who we are.”
For more information, contact the Alliance for Downtown New York, which provides service, advocacy, research and information on enhancing the quality of life in Lower Manhattan.