At the World Trade Center site in lower Manhattan on a recent drizzly morning, a white rose stuck out from one of the nearly 3,000 names inscribed on bronze parapets surrounding twin reflecting pools created to remember those killed in the Sept. 11 terrorist attacks. Construction sounds punctuated the otherwise quiet air from work on a major performing arts venue, a high-rise luxury condominium and other projects contributing to the area’s transformation from U.S. financial hub to 24/7 livable domain.

Nannies with baby strollers walked past along with residents carrying groceries just bought from a nearby Whole Foods. By noon, a sign of a reviving downtown New York office market, which is being newly tested by the pandemic, emerged in the form of lunch crowds spilling out of buildings to line up at the Hudson Eats food hall across the street.

Twenty years after attacks destroyed the World Trade Center complex and its iconic twin towers, the scenes observed at ground zero not only reflect changes that have taken place. They also show the spirit of what Bill Rudin, CEO of Rudin Management, one of New York’s largest private and family-run real estate developers, described as his father Lewis’ favorite tagline: “Don’t bet against New York.”

“It was a scary time,” Rudin, who was part of the heads of business and other groups that then-Mayor Rudy Giuliani assembled to discuss plans for lower Manhattan’s recovery, said in an interview. Near ground zero, “all of our buildings had dust. … There was a lot of conversation [in outside circles] about how lower Manhattan would never come back from this. … That afternoon I went to see my dad. He was very close to passing away. He loved the city. He said, ‘You got to work together to bring the city back.’ It was an incredible story of recovery and renewal and healing.”

After office space in lower Manhattan was cut by nearly 15 million square feet after 9/11 to 82.4 million square feet in 2002, the total has rebounded to 90.3 million square feet as of Aug. 1, according to real estate firm CBRE. Downtown office leasing, while still short of the pre-9/11 level of 8.7 million square feet in 2000, recovered to 7.3 million square feet in 2019, pre-pandemic, surpassing the 6.26 million square feet in 2001, CBRE data shows.

The story of that recovery from the events of 2001 resonates even more strongly in 2021, when New York is trying to recover from a blow to its office, residential and retail markets from the coronavirus. New York, the nation’s biggest commercial real estate market, was the U.S. epicenter of the outbreak in the spring of 2020, an event that closed businesses and drove residents away before the city began a revival now underway.

Back in 2001, a rebound from the attacks seemed far-fetched to those surveying the damage. “There was damage from the falling towers or facade or airplane parts,” said James Feuerborn, managing principal and co-head of Thornton Tomasetti’s forensic engineering team that spent months at ground zero combing the area south of Canal Street to assess building damage.

Even reams of paper blown out of the filing cabinets of the twin 110-story towers that landed on rooftops became a worry. The paper was a “foot deep,” Feuerborn said, and could create a collapse if it got wet.

Among 900 buildings his team assessed, about 150 to 200 were damaged and had to be addressed, Feuerborn told CoStar News.

7 World Trade Center, built on speculation without any tenants lined up, opened in 2006, the first building to debut in the new World Trade Center complex. 4 World Trade Center followed in 2013 before the marquee 104-story One World Trade Center, the tallest building in the Western Hemisphere, opened in 2014.

“I was there that day” when One World Trade Center opened, Jessica Lappin, president of the Alliance for Downtown New York, said in an interview. “It was really thrilling to see people walk into that building to work. It meant a lot for us in the neighborhood to have it be completed and open.”

Who was taking up space in those buildings told the story of lower Manhattan’s shift from the home of mostly financial sector businesses to also become a magnet for tech, advertising, media and information companies, known in the commercial real estate industry as TAMI tenants.

Among the newcomers, Vogue publisher Condé Nast became an anchor tenant at One World Trade Center, relocating from Times Square, while ride-hailing giant Uber and advertising firm Group M occupied 3 World Trade Center, which opened in 2018, and Spotify, the digital music streaming company, took up residence at 4 World Trade Center.

“When Condé Nast came, that got everyone’s attention,” said Lappin, adding the area is now also home to companies including Gucci, Diageo and McKinsey & Co. “The list goes on. There’s a steady drumbeat of household names. There are no more pioneers downtown.”

Lower Manhattan’s financial, insurance and real estate industries made up nearly 60% of private-sector employment in the second quarter of 2001, with that percentage falling to 33% pre-COVID in the first quarter of 2020, Downtown Alliance data shows.

“We moved 18 million square feet of tenants from outside of lower Manhattan and moved them from every single district in the city” into the area, Adam Foster, an executive vice president of CBRE’s Manhattan office who’s noted for lease deals including Spotify’s and Group M’s, told CoStar News. “I don’t think there were a lot of tenants that woke up and said, ‘Hey, I got to go downtown.’ We did a lot of convincing and canvassing. We literally have done hundreds and hundreds of pitches. We figured out a special sauce.”

That formula involved pitching the fact that the area offers a commute of under 15 minutes to “where young people live” in lower Manhattan or across the East River in Brooklyn or the Hudson River in Jersey City, he said, adding the new buildings also meet the so-called flight to quality demand from tenants who covet new or renovated properties.

“What employers are figuring out is transportation is amazing,” Foster said.

That appeal was further enhanced with the openings of the Oculus and Fulton Center transportation hubs that connect underground and give access to about a dozen subway lines and the Path train to New Jersey.

The new World Trade Center neighborhood also is more affordable. The market rent of $66 per square foot is, for instance, below the $88 in the Plaza District, the top U.S. and New York office market, CoStar data shows.

But what’s central to the pitch is also lower Manhattan’s makeover into a 24/7 neighborhood, a change that was underway even before 9/11.

“What happened was tragic,” Brian Collins, the New York chair for the Urban Land Institute and head of development for Silverstein Properties, the developer central to the rebuilding of the World Trade Center complex, said in an interview. “What’s happened in the 20 years is downtown has become a completely new place. It was a cold, quiet place at 5 o’clock. You could throw a stick and not hit anybody. The rebuilding has made it an active part of the community.”

A case in point: While 2 World Trade Center, which is under development, still remains an office building, the proposed plan for 5 World Trade Center has changed from an office tower to a mixed-used building made up primarily of residential units, Collins said.

Rudin is familiar with what a downtown business district needs to stay vibrant. In the mid-1990s, he worked with a group alongside city and state governments to create a plan after lower Manhattan’s lack of amenities, among other issues, led many office tenants to move out. Rudin’s property, 55 Broad St., in the area at one point experienced 100% vacancy. The developer owns 33 residential and commercial office buildings in New York, including five office towers in lower Manhattan.

“I remember trying to pitch a tenant for 55 Broad,” Rudin told CoStar News. “He said, ‘When I can buy a quart of milk, come and talk to me.’ There were no major grocery stores. There were no major restaurants. There weren’t the type of cool, hip restaurants or bars. ... We couldn’t rent [space] even at $18 a foot.”

Part of the plan at the time included converting many obsolete office buildings to residential towers to create a residential neighborhood from what seemed like a ghost town after 5 p.m., he said. There was also a deliberate effort to increase amenities, diversify the economy and attract office tenants from beyond the financial sector. Rudin Management improved internet connectivity at 55 Broad, a move made ahead of other owners. The plan largely worked. The company saw its office properties fully occupied again.

“There was a renaissance that was happening from 1995 to August 2001,” said Rudin. “It was a miraculous turnaround. Entrepreneurs were taking the chances to open restaurants and convert buildings. All those things were fundamental to build upon the foundation [after 9/11]. If we didn’t do what we did in the mid-1990s, the recovery wouldn’t have happened.”

That evolution continued post-9/11. The number of lower Manhattan residential buildings jumped more than 80% to 341 in the second quarter of 2021 from 188 in 2001 pre-9/11, Downtown Alliance data shows. The number of units more than doubled to 33,714 from 14,588 over the same time.

More are coming. The office building 1 Wall St., next to the New York Stock Exchange and former home to financial firms including BNY Mellon, is being converted to luxury condos. At 125 Greenwich St. is another new luxury condo project, designed by architect Rafael Viñoly. SL Green Realty, Manhattan’s largest office landlord, has begun leasing at 7 Dey St., a 34-story, mixed-use building billed as the neighborhood’s first development under the Affordable New York Housing Program.

“It’s really a diverse stock of housing,” from high-end corporate units to starter homes for younger employees, CBRE’s Foster said. “A third of people walk to work. Downtown is not just an office district. It’s a neighborhood. Now it’s a destination. My two college-age kids say to me, ‘We are going to a cool bar in ‘FiDi,’” the new moniker for the Financial District. “As great as downtown was pre-9/11, it got better. 9/11 was the catalyst.”

Lower Manhattan’s population about doubled to 64,000 pre-COVID in 2020 from 32,874 in 2000, according to Downtown Alliance. While 40% of the population left the area during the pandemic, the pro-business group said residential population levels are back to near-daily levels seen in early 2020.

The Financial District and Battery Park City in lower Manhattan saw the biggest purchase price growth among all Manhattan neighborhoods in the past 20 years since 9/11, Jonathan Miller, president and CEO of real estate appraiser Miller Samuel, told CoStar.

On the amenities front, the number of hotels has risen to 37 in the first quarter of 2020, pre-pandemic, from six prior to 9/11, with the number of rooms more than tripling to almost 8,000, Downtown Alliance data shows. The number of retail businesses also has increased to 1,272 pre-COVID in 2020, including half that were bars and restaurants, from 861 before 9/11 in 2001. Average asking rent has more than tripled to $406 per square foot in spring 2021 from the equivalent of $129 in today’s dollars in 2001, according to the group, citing the Real Estate Board of New York.

The Brookfield Place and Westfield World Trade Center shopping centers, featuring stores including Apple and Italian food market Eataly, have opened, along with chains including Target and Whole Foods. Meanwhile, the Michelin-starred restaurant Crown Shy and popular bar Dead Rabbit have added to downtown’s attractions.

The momentum “has created this cycle of synergy,” Lappin said. “That has a lot to do with the residential population and the creative workforce. The more you have places like that for people to go, the demand grows.”

The Ronald O. Perelman Performing Arts Center, being built from the ground up next to One World Trade Center and expected to open in 2023, aims to redefine lower Manhattan as a “cultural destination.”

The makeover also reflects the broader trend of developments combining office, hotel, residential and retail that’s witnessed throughout the United States, Collins said, adding New York’s Hudson Yards development on Manhattan’s west side as another example. “You are seeing that kind of move to cities from suburbs. It’s kind of the reversal of what happened in the '60s and '70s. Now my son [living in Manhattan] can’t imagine moving back to Fairville, Connecticut, where he grew up. [Young people] want to live near their friends, their jobs. … Every piece of the public transportation goes to the World Trade Center. That helps to drive the desirability.”

Still, the dramatic reshaping aside, the area, like the rest of New York, is hurting from the fallout of the pandemic. The remote-working trend has led to record-high office vacancies. Condé Nast, whose signing at One World Trade Center in 2011 was described as the largest in lower Manhattan in more than 25 years and “a boon for downtown,” is itself subleasing a total of 400,000 square feet of its 1.1 million-square-foot space at One World Trade Center.

Many retailers have closed their doors, including the popular local department store Century 21, national chain Gap, and tourist-dependent currency exchanges and souvenir sellers.

But Rudin isn’t worried.

“We go through 9/11,” he said. “We go through the financial crisis in 2008. Then you get to 2012, we have [Hurricane] Sandy. Every step of the way, people say New York downtown will never recover. If you go in lower Manhattan on Thursday night, you see people out and about. They are here in the city. ... I see who’s coming back into our buildings. [It signals employees] will eventually come back to work. It gives you the energy and hope and confidence the city is coming back.”