While commercial real estate struggles to stay afloat in Manhattan and across the country, two of New York City’s up-and-coming neighborhoods saw their office markets improve in the fourth quarter of 2009. In both Long Island City and Downtown Brooklyn, declining vacancy rates and positive net absorption at the end of last year were bright spots for office building owners, according to office market reports from Newmark Knight Frank.
Long Island City saw 15,550 square feet of office space removed from the market during the fourth quarter, bringing the total absorbed space during the year to 124,928 square feet. While rents declined to $23.75 per square foot in the third quarter — down from $26.56 per square foot one year earlier — the vacancy rate also dropped to 3.2 percent from 5.8 percent in the year-ago period. The Long Island City market was helped along by a 167,000-square-foot lease at 30-20 Thomson Avenue by the City University of New York, and a purchase at 34th Street and 48th Avenue by the Local 3 electrical workers union.
In Downtown Brooklyn, net absorption for the year was negative with 33,523 square feet coming back on the market, but the fourth quarter saw 165,848 square feet absorbed, indicating a bounce-back. Vacancies dropped to 6.4 percent in the fourth quarter from 7.6 percent one year earlier, while asking rents experienced a rare increase to $29.74 per square foot from $28.87 per square foot, though rents were still down 3.1 percent from the $30.69 per square foot they were at one year ago. Ninety percent of all office transactions in Downtown Brooklyn were for less than 5,000 square feet of space during the fourth quarter. TRD