All Signs Pointing Up for Downtown Manhattan

The influx of development in Lower Manhattan is accelerating, and by the year 2010 visitors and residents can expect twice as many hotels and a burgeoning social scene, according to a quarterly market report released yesterday by the Alliance for Downtown New York.

The report, an overview of the area's commercial, residential, hotel, and retail markets, is proof that the area is recovering from the attacks of September 11, 2001, the acting president of the Alliance for Downtown New York, William Bernstein, said.

"We're seeing a lot of firms coming in who are committed to being here," Mr. Bernstein said. "There is a diversification of our commercial tenants in Lower Manhattan so that it is less reliant on the financial industries' ups and downs."

Over the next three years, there are plans for 15 new hotels, including two mixed-used residential and hotel room buildings, according to the report. When completed, the amount of hotel rooms will increase to 5,700 from the current 2,200. These rooms are in demand, as the city expects 16 million additional tourists annually to visit downtown once the September 11 memorial at the World Trade Center site opens in 2009, Mr. Bernstein said.

Already, there is a shortage of hotel rooms in the city, the senior managing director of hospitality and gaming at the real estate firm CB Richard Ellis, Daniel Lesser, said. "We're seeing annual occupancies in the city well into the 80s, and what that means is theoretically the city is sold out," Mr. Lesser said, referring to the percentage of occupied rooms.

The report also found that residential development is booming, with plans for 15 residential buildings in the works and another 32 apartment towers already under construction. Of those buildings under construction, half of them are slated to be finished by the end of the year and are clustered primarily around Wall Street, West Street near Battery Park City, and east of William Street.

Downtown's commercial market is also strengthening. With average office rents in Midtown at $70 a square foot, many businesses are opting to move downtown, where average rents are just $44 a square foot, according to midyear data from the commercial real estate firm Cushman & Wakefield.

Also helping to drive more businesses downtown is the residential development. A senior director at Cushman & Wakefield, Carri Lyon, said the residential market attracts more retailers and restaurants to the area, and this, in turn, makes more people want to work there.

"It doesn't just feel like a financial town. It's a lot more than that," Ms. Lyon, who also works on Pine Street, said. "There's someplace to go for lunch, or buy a birthday present. That's made a huge difference for people who work late."

By the fall, the jeweler Tiffany's will open on Wall Street, and earlier this summer two luxury goods retailers, Thomas Pink and Hermès, opened on Wall and Broad Streets.

"It's the place people want to live, work, and play," Mr. Bernstein said.