Rising 'Tours' of Lower Manhattan Office Spaces Mask Downtown Market's Deepening Crisis

Several industry insiders reveal a grimmer reality in the Downtown office market than what is widely reported. Despite initial statistics indicating a 20-23% availability rate in the Financial District (FiDi), unseen "shadow space" may inflate these figures further. Notably, landmarks like Paramount Group's 60 Wall Street and 111 Wall Street are struggling, with the latter facing foreclosure. Additionally, pre-war buildings in Downtown face unique challenges due to their outdated appeal.

Potential for Recovery

Despite the challenges, there's a glimmer of hope as VTS data suggests increased interest in Downtown office spaces, especially by companies seeking over 50,000 square feet. This surge in interest indicates a potential shift in the market perception, with more companies considering Downtown due to lower rents.

Skepticism and Market Trends

However, some industry experts remain skeptical of these findings, particularly regarding the inclusion of smaller users in the data. Overall, the Manhattan leasing market seems to have slowed in the first quarter of the year, with fewer large deals compared to the same period last year.

Positive Developments and Tenant Demand

Despite the slowdown, some landlords like SL Green are experiencing increased demand, indicating that well-located buildings can still attract tenants. Recent leases at 485 Lexington Ave. and other locations demonstrate this trend, with notable companies securing space in various buildings across Manhattan.