Commercial Klutch: December Edition
Our masked correspondent checks in with his monthly report on the state of the commercial real estate market in Downtown Brooklyn and environs. The best improving office market indicator are the numbers from Two Trees in Dumbo. After starting the year with 65 vacant office spaces, plus whatever came back to them from defaulting tenants,…
Our masked correspondent checks in with his monthly report on the state of the commercial real estate market in Downtown Brooklyn and environs.
The best improving office market indicator are the numbers from Two Trees in Dumbo. After starting the year with 65 vacant office spaces, plus whatever came back to them from defaulting tenants, plus adding 22 spaces in a newly renovated floor, they are ending with about 35. 65 plus 22 plus 13 defaults (a guess) and you get 100. 100 to 35 is a 2/3 decline of inventory. That tells you that the market is back, especially given most of their tenants are business services and tech tenants, which are hyper sensitive to conditions. Prices have not gone up much, but velocity has.
The sidelined and stashed billions of real estate bucks are bubbling, with mega-sales of development sites in Williamsburg, plus two thirty-million dollar deals in Downtown Brooklyn for land and buildings. 205 Montague went for $33 million, and the other deal, still under wraps, is for $30. Latter owner got less than he could of and the buyer, in the market for years, put down $15 million in cash.
Every developer we know is searching for new sites to build. The banks are being pressured to be reasonable (god forbid) and let go of their dead sites to allow construction to resume. If a dead site is sitting, don’t blame us professionals, blame the crazy owner/sellers/mezz lenders or the banks for not letting go.
SLGreen’s 16 Court Street, which had done leases this year in the high twenties, will not go below 30 in 2011. As a side benefit to their building-wide renovation, and because the seller was The Estate of Joseph P Day and got the proceeds from the top of the market sale, the Day Estate, owners of 50 and 44 Court and 186 Joralemon, are actually fixing up their properties, contrary to their longstanding practise. 186 got a top to bottom, 50 got a lot and 44 just had its façade cleaned. Now they need to manage and broker the properties as befits the qualities of their buildings.
CBRichard Ellis, one of only three firms that report on Downtown Brooklyn, tells us a tale of two markets. Class A Forest City, Chase and Muss properties have a 16.5% vacancy rate. Class B and C – mostly Montague Court, plus assorted other DTB properties, and the major buildings in DUMBO are only 5.7% vacant.
cambria lost it and on market it will sell but hotels so hard to finance as is everything else i tend to believe if still on market in 90 days it is overpriced
Any idea what’s going on with the site/parking lot on Livingston between Court and Adams? Last I heard it was supposed to be a Cambria Suites but the land is apparently on the market. Any news or interest to report?
you can be sure several folks are all over Caton; developers, non profits, international
problem is no financing to build in that location right now, but there will be next year or so
“Every developer we know is searching for new sites to build.”
Can I call your attention to 23 Caton Place, which topped out then went into foreclosure? Mezzanine lender wiped out, developer foreclosed by Corus, Corus was sold by the FDIC to someone. http://bstoner.wpengine.com/brownstoner/archives/2009/04/bitter_standoff.php
actually, soft areas of Class A are more specific than that
Muss’s building with hotel and DA Hynes has very little if any space available today. MetroTech One is leasing up slowly but surely. 12 is full. The issue is the middle of the campus – 2,3,4 and 15.
Chase owns 3 and 4 and has had a combination of bad luck, outside pressures and ineffective – to say the least – handling of their space, so they need some help.