Lower Manhattan workers crowd restaurants such as Crown Shy and Manhatta for dinner, and it’s nearly impossible to get a reservation at the Dead Rabbit cocktail bar. The Perelman Performing Arts Center at the World Trade Center hosts elite shows, including the first production of the Tony-winning musical Cats: The Jellicle Ball. And on the weekends, the Battery is filled with families and tourists.
It’s a far cry from the downtown that existed even before the Sept. 11, 2001, terrorist attacks that destroyed the Twin Towers and killed almost 3,000 people. But in the quarter-century since the tragedy, Lower Manhattan hasn’t simply recovered: It has evolved from a business district that largely emptied out after work into a hub for housing, culture and nightlife, while adding a new generation of office towers.
“When you walk in the streets and you see young kids on their scooters, and dogs being walked, you know that you’ve been a success,” said Bill Rudin, co-executive chairman of real estate company Rudin, whose family has owned property downtown for decades and helped push an early effort to diversify the area before 9/11.
Lower Manhattan has added almost 25,000 residential units since 9/11, New York State Comptroller Thomas DiNapoli said in a report this week, and its population has more than doubled. Its workforce has diversified as well: Financial services, which accounted for almost half of downtown’s occupied space as recently as 2009, now represents 25%, according to CBRE Group Inc. Companies such as Spotify Technology SA, Uber Technologies Inc. and Scale AI occupy skyscrapers built after the attacks.
The transformation has been rocky and at times thrown into doubt — interrupted by the 2008 financial crisis, Superstorm Sandy’s floodwaters and the mass emptying of offices during the Covid-19 pandemic, which threatened the very model of people commuting to a dense business district every day. The shiny new towers of Hudson Yards and Midtown lured many companies seeking offices.
But office leasing is now growing at the fastest pace since before the pandemic. Former banking towers like 55 Broad St. and 25 Water St. were successfully converted to homes. Residents can snag groceries from places ranging from Eataly to Target, or dine at outposts of New York institutions Sant Ambroeus and P.J. Clarke’s.
Last year, 340 condos sold in the financial district at a median price of $1.3 million, according to real estate data firm StreetMatrix. In 2000, there were just 32 condo deals, with a median price of $485,000. The median rent, meanwhile, almost doubled to $5,050.
“Downtown continues to be in transition and continues to be improving,” said Mary Ann Tighe, CBRE’s chief executive officer for the tri-state region, who handled much of the office leasing at the World Trade Center site. She recalled that even before 9/11, downtown was a market mainly for financial companies, the government and the law firms that supported them, with virtually no other amenities.
“I had a girlfriend who lived downtown who would have to pack up her dry cleaning and carry it to Midtown to get it done,” she said. “There were very few basic services downtown.”
For Christina Roccos, an interior designer who moved to the Financial District 18 years ago, the landscape has completely changed. When she arrived, there were relatively few residential buildings, and families with children tended to find one another through the handful of schools in the area.
The mother of three started a WhatsApp group years ago with preschool parents to help form a sense of community; one group now has 1,000 members in it. She walks her dogs in the morning by Liberty Street’s Fosun Plaza and enjoys the public art, buys prosciutto and mortadella from Eataly and picks up flowers and cleaning products at Jubilee Marketplace on John Street.
“I don’t need to leave the neighborhood,” she said.
Longtime Plan
The roots of Lower Manhattan’s transformation began well before 2001. In 1990, Rudin thought the economics of his firm’s 55 Broad St. were so bad he wanted to mothball the building. Drexel Burnham Lambert, the investment bank that had occupied about 75% of the tower, had gone bankrupt. The stock market crash of 1987 and subsequent downturn had taken a hard toll; about a third of the area’s 100 million square feet of commercial space downtown was vacant.
By 1995, Rudin and other business leaders had created the Downtown Alliance, one of the city’s largest business improvement districts, and 55 Broad St. was revamped to focus on tech tenants. That change was part of a roadmap for the area written by Carl Weisbrod, who had taken part in the revitalization of 42nd Street. He aimed to expand on downtown’s transportation network and infrastructure to create a vibrant neighborhood less dependent on the financial industry, and conversions were a key part of the vision.
“What we started to do in the years preceding 9/11 was recognize that that era of a one-dimensional neighborhood really was no longer appropriate,” Weisbrod said. “Increasingly, cities and people demanded multiuse neighborhoods, and that’s what we started.”
The terror attacks turned that effort into something far more urgent, with immense financial, logistical and emotional complexity.
Flowers next to a reflecting pool on the footprint of a tower at the 9/11 Memorial & Museum in New York. Photographer: Michael Nagle/Bloomberg
Developer Larry Silverstein, who signed a 99-year lease for the World Trade Center complex just weeks before the attacks, became enmeshed in years of legal battles with insurers. Reconstructing the site itself involved building above active subway and PATH transit lines. At the same time, officials had to balance the desire to revive a critical piece of the city with the need to pay tribute to victims.
“It needed to be sacred ground, but also part of a living city — a place that honored what was lost while helping bring new life back to Lower Manhattan,” said Scott Rechler, who leads real estate company RXR and helped oversee the redevelopment of the World Trade Center as a former vice chairman of the Port Authority of New York and New Jersey.
There was also the question of safety. In the immediate aftermath, the attacks left downtown covered in debris and potentially harmful dust, with records released just this week showing that officials were weighing potential liabilities over exposure to toxic particles as people returned to the area. The World Trade Center had also been targeted by terrorists twice in less than a decade, leaving employers to confront fears about moving workers back to the site.
“I went on hundreds of tours, if not more, walking through with companies,” said CBRE’s Tighe. “And what I heard from executive after executive is, ‘You know, my wife would not feel safe if I was in this office building.’”
Michael Bloomberg, elected New York City mayor two months after the attacks, championed rebuilding the area as “a live-and-work-and-visit community for the world.” Dan Doctoroff, his deputy mayor for economic development and rebuilding, helped lead the city’s efforts, with plans for more housing, schools and parks. (Bloomberg is the founder and majority owner of Bloomberg News parent Bloomberg LP, and is chairman of the 9/11 Memorial & Museum and the Perelman Performing Arts Center.)
Community groups also came together to aid in the revival. Julie Menin, who was set to host a booth at a restaurant show on the plaza of the World Trade Center on Sept. 12, 2001, started Wall Street Rising to work toward downtown’s recovery, aiding small businesses and promoting cultural institutions. She is now speaker of the New York City Council.
“People said, ‘No one is going to want to work in Lower Manhattan again,’ and we proved them wrong,” Menin said. “When you see the success of the Lower Manhattan community and its ability to rebuild, it’s incredible to see.”
By 2024, the population of Lower Manhattan — encompassing Tribeca and the Financial District — reached 70,761, up from just over 32,440 in 2000, according to the state comptroller report. That accounted for 4.3% of all Manhattan residents, compared with 2.1% before the attacks.
Schools, Restaurants
Andrea Scotto, a 17-year Financial District resident, has watched how it has changed from a “desolate” area after 6 p.m. and how it recovered after Superstorm Sandy in 2012. She recalls having no electricity for a week and having to walk to work in Midtown and shower at a friend’s home after the storm. Now, she appreciates downtown’s “neighborhoody” vibes.
“It’s good for families,” Scotto said this week while watching her child playing in the sprinkler at the Imagination Playground. “There’s playgrounds, good schools, open spaces, the Seaport is right there. There are still a lot of good places to eat.”
Her husband owns bars in the area and they’ve enjoyed the resurgence, but Scotto also sees how eateries are getting priced out of the neighborhood, with families unable to afford “$100 meals per person.”
Restaurants such as Harry’s, which mostly catered to a Wall Street crowd in the 1970s and ’80s, now sees its long bar and deal-ready tables filled with a diversified, more youthful clientele.
“It’s not Wall Street but it still is,” said Peter Poulakakos, son of Harry. “The energy is fun. A lot of the youth are Wall Street professionals, or they’re in AI, architecture, design.”
The Poulakakos entrepreneurial spirit has helped expand the Harry’s empire to include popular happy hour spot Ulysses on Stone Street and the Dead Rabbit on Water Street. Investments across the Seaport, Battery Park City, Brookfield Place and the Westfield World Trade Center mall have added to the vibrancy of the area, with “a lot of smart people paying attention downtown,” Poulakakos said.
Eli Doroshow, 26, has lived in the area for two years and said people his age don’t necessarily think the Financial District is as cool as other parts of the city, but he likes that it’s not as hectic and that he’s just steps from the Fulton Street subway stop. The Washington, D.C., native also has come to appreciate living so close to the World Trade Center site.
“The pits where the old buildings used to be, I find to be very moving,” Doroshow said. “I feel really grounded in New York there, even though I’m not from here. I’m not a New Yorker. I feel the weight of it.”
The influx of residents has created demand for new services that would have been hard to imagine in the old financial district. About a decade ago, developer Billy Macklowe converted an office building at 156 William St. into a medical complex, complete with an imaging center and practices affiliated with Weill Cornell Medicine and NewYork-Presbyterian. The hospital nearby made the investment attractive, he said, but so did downtown’s changing demographics.
Macklowe is also betting on the residential boom, converting a 1920s office building near Tribeca’s Broadway and Reade Street into roughly 170 high-end rental apartments, with coworking space, a screening room, sports simulator and a pet-washing station. He is undeterred by the growing pipeline of residences.
“New York has proven itself, time and again, there is almost an infinite depth for the demand for rental housing,” Macklowe said. In the 1990s, “people went to live downtown as an economic choice not as a lifestyle choice. Now that you see these buildings getting terrific rents, they’re exciting and new and fun, it’s a lifestyle choice.”
CBRE’s Tighe sees a risk the pendulum could swing too far. With developers increasingly eyeing offices for residential conversion, and little new office supply expected beyond the upcoming 2 World Trade Center, Lower Manhattan could find itself short of quality workspace, she said.
As with the rest of the city, many older buildings are struggling to find takers. Higher-end spaces like Brookfield Place, a collection of office towers on the western edge of Lower Manhattan, are bustling. The complex is more than 90% leased, said Ben Brown, co-president of Brookfield’s real estate group.
Brown sees the appeal of downtown offices continuing to grow as new apartment supply leads to more cultural amenities, while public investment to protect the area from future flooding is poised to improve waterfront parks. Numerous city subway lines run through downtown, a legacy of the neighborhood’s history as a center of commerce that can’t be recreated elsewhere.
“At some point you’ll start to see economics that make sense for new construction,” he said. “We’re pretty close to that.”
For all the change, downtown has remained a financial-industry stronghold, from Citigroup Inc. moving its headquarters from Midtown to Greenwich Street, 10 blocks north of the World Trade Center, to Goldman Sachs Group Inc. staying downtown with a relocation to 200 West Street. Trading and investment firms have made it home, including Hudson River Trading, at 3 World Trade Center and Capstone, founded by Paul Britton, at 7 World Trade Center. Moody’s Corp. and law firm WilmerHale also are at that building.
American Express Co. decided earlier this year to move its headquarters to 2 World Trade Center, enabling Silverstein Properties to start construction on the final major office tower planned at the site of the attacks. Rudin, who remembers calling former AmEx CEO Ken Chenault after 9/11 to urge him to keep the company downtown, said the new headquarters is “icing on the cake” for the area.
Rudin pointed to the model of office conversions being replicated around the world, new amenities and draws such as Mercer Labs and the Balloon Museum as signs of the constant evolution.
“It all builds on each other, step by step,” he said. “Unfortunately it takes 25 years and a lot of work to get the recognition that it deserves.”
This article was provided by Bloomberg News.