Commercial Klutch: Downtown & Dumbo Edition

"This is the first in an irregular series of columns by an anonymous member of the commercial real estate world. Enjoy."

Why are you anonymous?!

"Dumbo continues to lead the Brooklyn market in leasing activity by providing space in the $18-$33 per rentable square foot range, with most around $24 to $28, the Brooklyn office market’s sweet spot. Downtown Brooklyn space at that price is now rare. When you can get a renovated 3,500 square foot corner on a high floor at 20 Jay Street (above) for $25 per with a sunny west view of the Manhattan Bridge two blocks away, with the Brooklyn Bridge visible behind it, why go anywhere else? No wonder Two Trees leased the two money-view corners of the 8th floor first."

Yep, Manhattan is a dump. Who wants to be in the City?

"Meanwhile, Downtown retail rents continue to break records. The first two blocks of Court have the highest foot traffic in the borough, so Chase paid $260 per foot to renew its ATM box at 16 Court Street. Jamba Juice was about to pay $240 for much the same size at 32 Court until bailing at the last minute (lease out, electric work done by landlord). Word is that Jamba's still in the market for Downtown space—hopefully the next deal will be smooth like their tasty products. With the new bank branch around corner at 188 Montague is paying $130, it's no surprise that landlords want these kinds of reliable, deep-pocket credit tenants."

I like to see Jamba Juice lease a space for that much money. Inflation is going to kill their margins! It's no surprise that landlords want these kinds of reliable, deep-pocket credit Suckers to overpay.

"While not everyone's happy about Brooklyn’s corporate real estate direction, there is a real business-supportive value to new tenants such as Morton’s 14,500-square-foot steakhouse installation on Adams Street in the Marriott Hotel extension property. Aside from the dozens of jobs they bring to our locale, Downtown needs corporate dining to support existing professional jobs and business here, as well as help bring more. The lack of a serious steak house has been a Brooklyn dining gap, now being filled on Adams Street."

Go to Peter Lugers! If any genius tries to open a high end Steak House downtown, will be out of business within a year. High food cost and slowing consumer spending is not good now.

"Finally, the Downtown landlord that has done the least to maintain its prewar office buildings is finally waking up. After selling 16 Court Street (36 stories, 317,000 rentable square feet) to SLGreen - the largest prewar office renovator on the planet - JP Day Realty is gut-rehabbing its own 186 Joralemon Street property (12 stories, 80,000 rentable square feet) and selectively leasing space well below their official $40 asking rents I hear."

I wonder about the bottom line. Take a good look people the CONsumer is tapped out and cannot support any new business at this time. I think the business environment is very shaky now and until we can get inflation under control it will get worse.

The What

Someday this war is gonna end...

Posted by: what at May 30, 2008 11:22 AM

"Great, the What has lost what little was left of his mind."

Last night I was watching the news and they panned a shot of Times Square. There was no cars driving down TS!!!!! I said to myself Oh S&*(! I observed that the high Gas prices has a negative effect on the Consumer. People are having real problems with inflation and I can't see someone opening a business in this environment.

The What

Someday this war is gonna end...

Posted by: what at May 30, 2008 11:34 AM