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April 5, 2012
Brooklyn’s Class A woes
Borough’s Downtown market sees highest availability in office space in more than a decade
The Real Deal
by Adam Pincus
The Atlantic Yards office tower(s), and its bogus 10,000 permanent jobs, coming never.
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.
...The availability rate — measuring space vacant now or available over the next 12 months — in Downtown Brooklyn’s modern office space is among the highest in the nation.
Developer and landlord Forest City Ratner controls most of the market, with about 5.2 million square feet in six buildings. Most of those buildings are in the Metro Tech Center complex, as well as three additional buildings, including 1 Pierrepont Plaza.
Forest City has just 3 percent vacancy in its portfolio, data from CoStar Group shows. But it acknowledged that about 18 percent of the portfolio is available, either directly through Forest City or indirectly through existing companies in the form of a sublease.
NoLandGrab: There's a shocker — Forest City Ratner officially claiming a low vacancy rate, while reality begs to differ.
Posted by eric at April 5, 2012 10:56 AM