At the end of 2015, asking rents for office spaces in Downtown Brooklyn jumped by 30 percent which is the biggest spike it has reached in 10 years' time.
According to a recent research conducted by the multinational real estate firm Newmark Grubb Knight Frank, the office asking rents in North Brooklyn rose to a historic high of $51.99 per square foot in last year's fourth quarter. In comparison to 2014's $40.25 per square foot, 2015's record price showed a significant increase and should cause some concern.
New mega developments such as Industry City in Sunset Park and the Brooklyn Navy Yard have been pushing up the asking rents since construction started.
In addition, Newmark noted that the upsurge in Downtown Brooklyn can largely be linked to the Empire Stores development which opened at Brooklyn Bridge Park at the end of 2015.
The 450,000-square-foot infrastructure which is a partnership venture by Midtown Equities, Rockwood Capital and the HK Organization broke the borough's asking rent record when the developers announced they would ask $85 per square foot for the office space located on the rooftop.
Leasing in the Empire Stores development started in late 2014 and by December 2015, the developers revealed that they have struck deals for office spaces ranging from 45,000 to 150,000 square feet. Among the tenants that signed a leasing contract was furniture maker West Elm which will occupy 150,000 square feet of the former coffee warehouses.
The availability rate in Downtown Brooklyn during the fourth quarter of 2015 was at 6.3 percent, a slight improvement from 2014's 6.9 percent.
A similar jump was experienced in the neighborhood of north Queens where Long Island City office rents climbed steadily to reach a record asking price of $34.28 per square foot. Office asking rents in the last quarter of 2015 were driven up by major deals such as the relocation of Macy's from Downtown Brooklyn to Queens' Factory Building.
