Leasing of Downtown Brooklyn Office Space Ain't So Hot

Prime office space in Downtown Brooklyn is readily available but having trouble finding takers, the Real Deal reports:

The office market in Downtown Brooklyn was once going strong with a full slate of long-term leases, and a roster of financial firms like Bear Stearns & Company, which were locating back offices there to flee expensive Manhattan rents. But today its high 90 percent occupancy rate masks a staggering 26.8 percent availability rate — from downsizing tenants and expiring leases in its 8 million square feet of modern, Class A office buildings. That’s according to fourth-quarter 2011 figures, the most recent available from commercial firm Jones Lang LaSalle. The growth of vacant and available space has been a long time in the making, as financial firms reduced head counts, moved staff overseas, or decamped to New Jersey.

Another scary stat that’s trotted out is that availability in Downtown Brooklyn modern office space is among the highest in the entire country. There are a lot of possible reasons for the high availability rate, according to the article, such as that Jersey is more financially attractive to some firms. But, to us, the real story in this article that’s only mentioned in passing is that Downtown is in the midst of transforming into nearly as much of a residential zone as a commercial one thanks to the 2004 rezoning of the area. While the rezoning was meant to spur commercial and residential development, it sure has brought a lot more new residents than offices or the folks who work in them. On the other hand, as an article in the Observer recently pointed out, there is basically now office vacancy in Dumbo, and the tech-savvy neighborhood is incredibly popular with Brooklyn’s “creative class.” So maybe companies considering office space in Brooklyn aren’t exactly looking for the white-show firms of old, and perhaps future commercial developers should take heed.
Brooklyn’s Class A Woes [The Real Deal]