NEW YORK ( TheStreet) - Real estate values in New York City's Financial District have ebbed and flowed since the September 11, 2001 terrorist attacks a decade ago, but not only has the area recovered it is outperforming other Manhattan neighborhoods.
More than 20 million square feet of new development have been built in Lower Manhattan over the last 10 years and asking rents -- both for commercial and residential properties, leases and purchases -- are on the rise again following the Great Recession, according to a Real Estate Board of New York (REBNY) report.
Retail rents rose between 24% and 68% throughout the city over the last decade, depending on the neighborhood, with the steepest jump in the downtown area, where retailers can now expect to pay upwards of $100 per square foot.
Commercial space peaked in the summer of 2008 at $62.27/sf in Lower Manhattan, compared with $99.22/sf in Midtown and $88.37/sf in Manhattan overall. Immediately following Sept. 11, those rates were $42.28/sf, $61.28/sf and $54.68/sf, respectively, REBNY said.
With millions of commercial square footage opening up in the Financial District over the next year or two, it could be 2018 or even 2020 before average rents climb back to prerecession levels, Ron Lagnado, a partner in the Real Estate Services Group at WeiserMazars, told
, but the trend is moving in that direction.
Residential rental rates jumped between 41% and 43% in Lower Manhattan between 2001 and 2011, with overall Manhattan rental values gaining less than 19% in the decade, the REBNY report also showed. Average rents for studios, one-bedroom and two-bedroom apartments were cheaper below Canal Street in 2001 than in overall Manhattan, REBNY reported, but are now higher in all three categories.