Over the next several years, Brooklyn is slated to gain around 7 million square feet of office space. And of the 17 million square feet that already exists, just three percent remains vacant, a sign that made developers eager to expand the supply. But there may be a problem: large companies aren’t exactly rushing to lease all of that shiny new office space within new developments.
Projects like Downtown Brooklyn’s The Wheeler, the former Watchtower Building in Brooklyn Heights (though a Kushner Companies spokesman tells Curbed that the buildings have yet to begin marketing to prospective tenants), and the conversion of Williamsburg’s former Domino Sugar Factory into The Refinery are all hoping to lure more so-called “creative” brands from Manhattan and into Brooklyn. However, only one non-government employer has signed a lease for more than 100,000 square feet since 2015, reports Bloomberg Markets.
The problem, says Bloomberg, could be that developers in Brooklyn are increasing office space at a time when Manhattan’s market is easing up , eliminating the need for companies to seek out cheaper spaces elsewhere. It’s also not as commuter-friendly for those living in Jersey or places like the Bronx (and even Queens, which doesn’t offer the greatest commutes to Brooklyn). Simply put, “The tenant pool is … not there yet,” Zev Holzman, senior managing director at Savills Studley Inc., told Bloomberg.
The last major lease by a private company for office space in Brooklyn was when coworking company WeWork signed on as the anchor tenant at the Brooklyn Navy Yard, taking up about 222,000 of the building’s 675,000 square feet of space.
While some smaller companies have leased small office spaces around the borough, it’s going to take much greater effort to lure bigger brands away from Manhattan. For the sake of all that new office space, let’s hope it works.
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