The Real Deal New York

What’s next in commercial real estate? Top execs from WeWork, CushWake, RKF and TerraCRG weigh in

Panelists at TRD showcase discuss co-working, Brooklyn market and retail sans the L

May 12, 2016 05:46PM
By Rich Bockmann

From left: Bruce Mosler, Artie Minson, Robert Futterman, Ofer Cohen and The Real Deal's Hiten Samtani

From left: Bruce Mosler, Artie Minson, Robert Futterman, Ofer Cohen and The Real Deal’s Hiten Samtani

UPDATED, 9:10 a.m., May 13: Brooklyn’s commercial market may very well be a field of dreams: If you build it, they will come.

“What’s going to change Brooklyn in terms of the tenancy is going to be the product that they build,” Bruce Mosler, chairman of global brokerage at Cushman & Wakefield, said during a panel on New York City’s shifting commercial real estate scene at The Real Deal’s New York Real Estate Showcase and Forum Thursday.

“We haven’t yet seen that first blue-chip lease in Brooklyn … the Facebooks, the Googles,” he added.

Mosler joined WeWork’s Artie Minson, RKF’s Robert Futterman and TerraCRG’s Ofer Cohen on a panel moderated by The Real Deal’s Hiten Samtani. The dealmakers discussed some of the big changes taking place on the commercial front, including co-working, co-living, the unique demands of TAMI tenants and an end in sight to rising retail rents.

Mosler said that projects like Dock 72, the 675,000-square-foot new office development at the Brooklyn Navy Yard, will set the standard and draw the types of corporate tenants that have yet to plant their flags in Brooklyn.

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The building is being developed by Boston Properties, Rudin Management and WeWork, and Minson said starting from scratch will provide the co-working company with an opportunity to improve its platform in ways it hasn’t yet done.

WeWork founders Adam Neumann and Miguel McKelvey grew up in communal settings, Minson said, so they have a unique perspective as to how to make increasingly denser spaces more attractive and functional for users.

“I think it comes down frankly to how you do it,” Minson said.

Minson came to WeWork from Time Warner Cable, and made the analogy that if real estate is the cable, then WeWork is the programming it brings to customers. Having the opportunity to build a space from scratch in Brooklyn, he said, will allow WeWork to push things like “design, amenities and services to a new level.”

(See more event highlights: Indian buyers jump onto the NYC real estate bandwagon

On the retail side, Futterman said that with big supermarket chains like A&P and Fairway filing for bankruptcy, the more adaptive retailers are finding ways to fit into smaller footprints. The most innovative retailers are finding ways to make their stores go “ground and up or ground and down” the way that Whole Foods and Trader Joe’s have been able to do.

Futterman also noted “the retail market right now that needs a major adjustment,” saying that prices in many corridors had gone out of control.

Cohen bemoaned the death of 421a and its effect on Brooklyn development, saying that “in terms of new projects, we’re at a complete halt,” and noted that investment sales in the borough had dropped more than 65 percent this year.

And on the topic of the L train’s proposed closure, Cohen said he thinks it might have more of an impact on commercial properties in places like Bushwick than on the residential market in a neighborhood such as Williamsburg, which he said should be insulated because it’s more mature.

It won’t be a total disaster, he added, as people could “just take Uber for a year.”

He admitted, though, that predicting the habits and patterns of millennials is tough to do.

“If you look at the research on millennials, they’re not making decisions about where they’re going to live in four years,” he said. “They’re making decisions about where they’re going to live in the next 12 months.”

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