More than 600,000 sq. ft. of office space in lower Manhattan was leased this week, pushing the downtown market’s vacancy rate below 13% for the first time in a year. Two large leasing deals were responsible for the positive trend: Health Insurance Plan of New York (HIP) signed a 20-year lease at 55 Water St., while Teachers’ Retirement System of New York (TRS) signed a 157,000 sq. ft., 15-year lease within 55 Water St.’s south building.

Insignia/ESG and CB Richard Ellis represented the Retirement Systems of Alabama, the owner of 55 Water St. GVA Williams represented HIP and The Staubach Co. represented TRS. The aggregate value of the HIP deal is estimated at roughly $100 million.

"One of the factors that drove this deal for HIP was the new amenity package in progress for 55 Water St. With a combined 642,000 sq. ft., these deals are a tremendous coup for lower Manhattan because it means an imminent influx of between 1,500 to 2,000 employees," says Howard Fiddle, one of Insignia’s leasing brokers who handled the deal. According to Fiddle, 540,000 sq. ft. remains to be leased at the 3.8 million sq. ft. property.

HIP worked closely with the New York City Economic Development Corp. and Empire State Development Corp. to structure an attractive government incentive package.