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Downtown office market provides an attractive investment arbitrage opportunity

•Downtown office buildings are selling at a significantly greater discount to Midtown and Midtown South assets than the underlying rent discount would suggest, creating attractive buying opportunities.

•This Downtown asset pricing discount has remained steady during this stage of the cycle, despite asking rents that have risen by 52.4 percent in Downtown versus 43.1 percent in Midtown and Midtown South since 2009.

•Foreign institutions have encouragingly become more active in Lower Manhattan, helping to push office investment volume to nearly $4.0 billion in 2016. This represented a more than twofold year-over-year increase and the highest volume recorded in the market since 2007.

•Long term, Lower Manhattan will benefit from the completion of major transit improvements, larger and more varied retail options, a growing and educated residential population, and sustained office leasing velocity from numerous industries. 

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