Brooklyn: The place to be, if you can find the space | Crain's New York Business
Corporate heavyweights and fast-growing startups are searching for commercial space, and turning up empty.
Chase, Verizon, MakerBot and other boldfaced Brooklyn employers find themselves in a quandary.
Spurred by cheap and roomy offices or visions of waterfront warehouses within biking distance for their youthful workforces, corporate heavyweights and fast-growing startups alike are casting about Brooklyn in search of commercial space. And they're turning up empty.
"We're in a crisis mode," said Christopher Havens, a commercial real estate broker with AptsandLofts.com. "Everything's in shortage, from townhouses on down."
The search for office space in the borough is likely to be a major plotline in the story of its economic health in 2014. There are more than 100 tenants in the market in Dumbo—already bursting at the seams with 500-plus tech companies—and downtown Brooklyn that can't find space, Mr. Havens said, adding that it is the tightest office market since World War II.
Gowanus, home to the city's newest Whole Foods, is full. There are only two vacant commercial spaces at Atlantic Center, and three at MetroTech.
There are several projects in the pipeline. The new commercial space at 1000 Dean St. in Crown Heights is giving some hope, as is the Domino Sugar Factory project by Two Trees Management Co. Jed Walentas, a principal of the firm, has said he wants to build enough office space for up to 4,000 workers, more than was originally planned. And real estate scion Jared Kushner plans to transform at least half of the 1.2 million-square-foot Jehovah's Witnesses complex in Brooklyn Heights into office space geared toward tech startups.
But most of the big developments slated to sprout up around Brooklyn in 2014 are residential. The $2 billion project to redevelop the Domino Sugar plant in Williamsburg will add two residential high-rises to the waterfront—one of 30 stories, and the other, 40 stories. The Lightstone Group is building a 12-story, 700-unit tower along the fetid Gowanus Canal. And 10 new luxury towers that can accommodate at least 15,000 residents will be going up at 77 Commercial St. as part of the Greenpoint Landing megaproject.
As more and more firms scrounge for space, unemployment in the borough remains high: 9.6% in November, more than that of the city (8.9%) and the nation (7.3%).
"This is a pivotal moment for Brooklyn," said incoming Borough President Eric Adams. "We've had great success in recent years, but that popularity must be turned into prosperity for all. The key to continued, stable growth will be aligning the goals of existing businesses, new business investors and Brooklynites at all income levels."
Brooklyn Chamber of Commerce President Carlo Scissura thinks the next frontier is in farther-flung, poorer neighborhoods where unemployment and poverty are still a problem.
"The greatest economic development challenge for the de Blasio administration, and the most critical, is to look to the east—namely places like East New York, Brownsville—just miles from the booming waterfront, Barclays and the airports, and a place where strong job and workforce development funding and training can put thousands of people to work in their communities."