Lower Manhattan will continue to absorb tenants priced out of Midtown South
Midtown South rents, which have increased 57% since 2007, represent a 38% premium over Downtown rents.
Midtown South rents, which have increased 57% since 2007, represent a 38% premium over Downtown rents. As creative tenants continue to be priced (and sized) out of Midtown South, users are increasingly looking Downtown for affordable options at scale.
As evidence of this trend, 57% of all relocations to Downtown in 2018 originated in Midtown South – compared to a historical average of 30%. The majority of these users fall within the creative class, representing a shift in Downtown’s occupancy dynamics.
With Midtown South rent growth expected to outpace other Manhattan submarkets, the trend of Midtown South-to-Downtown relocations will likely remain a benefit to the Downtown market for the foreseeable future.
Source: JLL Research