Commercial Klutch: July Edition

Our masked correspondent is back with this month’s lowdown on the commercial real estate scene in Brooklyn.

Small tenants powered Brooklyn’s commercial office dynamism of the last three years, yet the job growth they provide is being increasingly strangled by the lack of office inventory. Tenants seeking from 500 to 1,500 square feet are 90% of the unit demand in Brooklyn yet there is virtually no significant inventory in northern Brooklyn left right now. DUMBO’s two largest landlords are officially out of space and generally holding what they can scrape together for their current tenants and special friends. One small building in Vinegar Hill is pushing the price envelope, leasing more slowly therefore than it might, but getting deals done in the mid-thirties per RSF because the spaces are attractive.

Creative and tech tenants don’t want to be on Court & Montague. A few have caved given the superior train location, like Sollega and MiMedia at 32 Court, but most balk right at the lobby level. So what do they do? Some chose brownstone space around Downtown Brooklyn, some go out to Sunset Park, some stay in their apartments or green desks or whatevs. We had hoped 370 Jay could become a small tenant building, but that is not feasible given the costs. The NYU Poly development may provide some space, but not nearly what is needed. 1000 Dean, this blog’s new building, will provide up to 75 small spaces next year, a huge start. Williamsburg, East Willie, Bushwick, G-Point all have some space, but it is either not code renovated, going resi or if good is priced $35-$45 a foot!

For now, we have a problem. For the future, preservation is the key. What do I mean? Five commercial properties on Sands and Prospect sit at the ‘back door’ to the Brooklyn Bridge next to both the High Street A & C station and the York Street F station. They are almost vacant, owned by the Watchtower, perfect for renovation into small tenant space. As the Witnesses take superb care of their buildings, they likely just need HVAC upgrade, divisions and more bathrooms. Of course one would add service retail in the base. Please don’t let these be re-zoned residential!