Williamsburg-based Rabsky Group will soon ink a deal to pay roughly $48,000,000 for a potential-laden warehouse in the Bushwick loft area. Can you guess what they have in store for the site? Not condos!
Rabsky is jumping on the creative-Bushwick bandwagon, joining developers like Bushwack Capital and All Year Management to build commercial space (offices with a dash of retail) in the formerly industrial ‘hood, reported The Real Deal.
The single-story warehouse at 101 Varick Avenue (or 471-485 Johnson Avenue) offers 146,000 square feet of space on a 3.4-acre lot. It has been owned and occupied by retail fixture and display case manufacturer M. Fried since 1991.
Rabsky Group is a notably prolific and secretive firm with a hand in many developments boroughwide, including the Rheingold Brewery development and Downtown’s 625 Fulton Street. It likely plans to capitalize on the emerging submarket for creative arts, office and retail space in the Bushwick loft area, which the City considers East Williamsburg.
The deal is anticipated to close in February, with Rabsky shelling out an estimated $170 per buildable square foot. Meanwhile, M. Fried has signed a lease for a 50,000-square-foot space at 110 Beard Street in Red Hook, where it plans to relocate.
Once the redevelopment is completed, Rabsky will likely charge in the range of $40 to $50 per square foot for office space, and $35 to $45 per square fooot for retail — based on the area’s current average asking rents, according to The Real Deal.
The area is booming when it comes to the conversion of dismal, aging factory spaces and warehouses into pricey commercial space. Just last week, architecture firm ODA released renderings for a hip 100-key hotel nearby.
Another warehouse at 599 Johnson Avenue is being transformed into a 35,000 square-foot night club, and yet another former industrial spot at 99 Scott Avenue will eventually open as a mixed-use event hall — restaurant and winery included.
The trend comes from the area’s high-value real estate and large supply of sprawling, low-lying industrial space. Additionally, the neighborhood is zoned nonresidential, with certain sections in a protected Industrial Business Zone (IBZ).
While the warehouse conversion aspect of the trend is area-specific, the need for office space is Brooklyn wide. A number of developments in residential areas have recently switched plans from residential to commercial to accommodate the increasingly high demand and record low vacancy rates for office space. In Dumbo — Brooklyn’s most expensive neighborhood — the developers of 10 Jay Street, also known as the Sugar Crystal Building, changed tack from condos to offices.
The large amount of warehouse conversion in Bushwick can be expected to increase the area’s daytime traffic and demand for nearby homes, as well as bring an influx of young professionals into the loft area, known for its population of recent college graduates sharing illegally converted industrial spaces.
Developers may be betting the area will become the next Dumbo or Williamsburg. Even with its restrictive zoning, commercial rents are likely to rise, much as they have in commercial Dumbo or Williamsburg’s protected IBZ zone, home to the Wythe Hotel and Brooklyn Bowl.
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