While Manhattan Gasps, Brooklyn Bloats With Full Offices

Downtown Brooklyn appears to have taken the wind out of Manhattan’s sails when it comes to filling its office space.

By Jeff Vasishta April 21, 2017

Blame it on co-working spaces or working from home. Whatever the reason, Manhattan office space is gasping for tenants and landlords are growing increasingly desperate to get them. The NY Post reported recently that a tenant looking for a 4000-square-foot space in Midtown was bombarded by landlord’s offering ever sweeter deals.

“They fought over the tenant,” Nicholas Gilman Executive V.P. of Byrnam Wood said. “They wouldn’t stop calling.” A final deal provided brand new temporary space while a new space was being built to suit along with five months free rent, which works out about a month per year off of the lease. The final rent was $7 per square foot lower than the initial offer.

Related: Emotional Rescue: How Technology And Experiences Are Keeping Customers At Malls

“It really reflects a change in psychology,” Gilman says. “It’s a strange and stark contrast to six months ago when you couldn’t get a call back.”

The net result has been a growing amount of available space, with people working in denser quarters and others working remotely. The recent construction boom is only going to exacerbate the issue, with 24 million square feet coming to the market over the next five years according to SL Green Realty.

Developer Tishman Speyer’s 620,000 square-foot office tower on top of the Macey’s department store in Downtown Brooklyn is part of a massive surge of office buildings in the area which are competing directly with Manhattan for tenants.

Related: The City May Be Forced To Take Over Privately Owned NYC Streets

“I see three factors at play,” said Paul Travis, a developer and the managing partner at Washington Square Partners. “We are offering quality office space at a lower price point than Manhattan; there are tax incentives available for companies that come to Brooklyn; and, last but not least, the fact is that Brooklyn is where the talent pool is located.”

In total, Downtown Brooklyn has 17 million square feet of office space, and the new office construction is expected to add two million to three million square feet, according to the Downtown Brooklyn Partnership. The vacancy rate is tight 3.1 percent.

“We get calls from companies wanting to move to Downtown Brooklyn, but with the lowest commercial vacancy rate in the city, there is nothing available,” said Regina Myer, the president of the Downtown Brooklyn Partnership. “We are losing these jobs to other neighborhoods and even cities outside of New York, so having this new Class A office space is critical.”

Jeff Vasishta



Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

    Avocado toasts are the reason why millennials can’t afford a home, says one Australian real estate developer. #AvocadoToast #Millennials
    Five years on since Superstorm Sandy, Queens’ coastal peninsula is in the midst of a development boom. #Development #Rockaways
    It turns out, renters can’t get enough of good ol’ no-doorman-no-frills apartments. Too bad developers aren’t building any. #Doorman #LuxuryRentals
Developers Jump Aboard The Trend To Revamp Transit Hubs And Remake Cities
Never has the often used marketing term, “close to transportation” been more important when attracting home buyers. These days it’s not just homes that are…
Millennials Are Fueling The Current Sizzling Real Estate Market
Ever wondered why the hosts of home improvement shows seem to be getting progressively younger, along with the fresh-faced couples getting their new properties made…
The Best Cities For Recent Grads To Rent – Without Blowing Their Entire Paycheck
What’s next post graduation? For most, the logical answer is to find a job. After the excitement of finishing your studies and the big celebration,…
Luxury Knows No Limit In Malaysia As A Deluge Of New Developments Hit The Market
The amount of newly constructed high-end real estate in Malaysia is almost as abundant as the lush vegetation which covers the tropical landscape. Despite vacant…
Don’t Call It A Commune – Upscale Co-Living Is Attracting Major Development
What may have once been referred to as a commune is today termed a co-living space. The big news that it’s not hippies with hemp…
It’s Official—New York Is Now The Most Expensive City In The World To Build
As if you didn’t already know, it’s expensive to build in New York City. Not just expensive but now officially the most expensive place in…
An Ultimate Destination For The Most Comprehensive Real Estate Data, Agorafy Prepares To Launch Nationwide
In the coming days, Agorafy will be entering a new chapter. It is the beginning of a new growth cycle in real estate technology with…
A New Beach Front Condo Building Slated For the Rockaways Amid A Slew Of New Development
Proving that New Yorkers are the masters of reinvention, particularly when it comes to real estate, a new millennial-friendly condo tower is due to rise…

TOP 10