Brooklyn has been a strong magnet for residents for many years now, but what about the business community? Many former industrial waterfront areas in DUMBO, Williamsburg, and Greenpoint have been either retooled for or replaced with condos, none of which seem to have too much trouble finding eager buyers. The past few years have seen a push to create office space, as well.
Some big-name retailers have moved into downtown on Fulton Street to serve the new residents coming into all the nearby condos that have sprouted up. Well beyond downtown, the race to create office space is instead resulting in a glut of empty space. According to a recent article on Bloomberg.com, there are plans by various developers to build about seven million square feet of office space in the next few years, mainly in the Brooklyn Navy Yard and Sunset Park, as well as the old Watchtower Building in DUMBO. The article sites 23 projects due to open by 2020. That much space will require either a ton of small companies taking out leases or help from a few big companies that will take several floors of space at once. The problem experts are seeing is that the big guys don’t seem too eager to make the move.
Prices on Manhattan office space have plateaued, and there is room for negotiation there, so big companies with no real yen for Brooklyn have little incentive to pay for a big, expensive move and to uproot their employees for possibly newer digs and beautiful offices in a place that’s frankly not that easy to get to from Westchester, New Jersey, Connecticut, or even Manhattan and Queens. Big companies that have recently moved to the NYC area, including Facebook and Alphabet (Google), have settled into Manhattan, and those that have come to Brooklyn have put pieces of their businesses in rather than move the entire company.
Several commercial real estate experts interviewed for the Bloomberg article remain upbeat. Although the signing of a 100,000+ square-foot lease would be newsworthy and perhaps a shot in the arm, Andrew Hoan, the CEO of the Brooklyn Chamber of Commerce, noted that Brooklyn has added jobs faster than any other borough, and related his feeling that not being dependent on large companies is “a good thing.”
So, bring on the office space, we say. As long as it’s being concentrated in otherwise unused or underused buildings like those in the navy yard or Sunset Park’s Industry City, it’s a plus for Brooklyn, and in time, we feel, for the patient developer as well.
Read the full article on Bloomberg.com: