Massey Knakal in talks to cut Brooklyn space

TRD New York /
Aug.August 18, 2010 06:30 PM
Ken Krasnow and 205 Montague Street

The city’s top investment sales firm by sales volume, Massey Knakal Realty Services, is in negotiations to relocate its Downtown Brooklyn office to a different space about half the size within the same neighborhood, a company official said.

The firm is in talks with a tenant that would sublease the entire 18,750-square-foot third floor Massey Knakal currently occupies in 205 Montague Street, a Class A building, company managing director, Ken Krasnow, told The Real Deal. The brokerage would remain the responsible party through the expiration of the lease in 2016.

A move will allow the company, “to consolidate some of our operations” in a new location, Krasnow said. “Right now we have proposals out there for three Class A buildings [in Downtown Brooklyn] for approximately 10,000 square feet to relocate our Brooklyn headquarters.” He did not identify the addresses.

Krasnow would not identify the prospective subtenant, but industry sources said it was Clearwire, an Internet service provider based in Kirkland, Wash. Clearwire has signed a lease with Massey Knakal, but the deal needs approval from the property owner, Midtown Equities, one of the sources said. Midtown Equities bought the building July 22 for $33 million.

The website Brownstoner reported in July that Massey Knakal was looking to vacate or sublease its space at 205 Montague Street. At the time, Massey Knakal would neither confirm nor deny the story when asked by The Real Deal. Midtown Equities declined to comment.

In 2006, in the midst of a booming real estate market, Massey Knakal announced its move to the 205 Montague Street location with predictions that it would need space for as many as 100 people. But as the economy soured, the firm said in the fall of 2008 that it had cuts its broker pool citywide by about 25 percent.

Last year the firm, which has offices in Manhattan, Brooklyn, Queens and New Jersey, had more than 150 property sales in New York City worth more than $600 million, figures from CoStar Group show.

Today, there are about 30 people in the Brooklyn office, which covers Brooklyn and Staten Island, comprised of 12 agents, five associates and additional support staff, Krasnow said. The number of agents is down from 21 in 2008. There are not plans to cut staff as part of the move, and in fact the staff may grow, he said.

Krasnow would not disclose the value of the original 2006 lease which runs to 2016, or terms of a sublease, but sources said the original lease was for about $30 per square foot. Massey Knakal’s subtenant will pay less than the face value of the rent, but the difference is “very minimal,” Krasnow said.

The new spaces the firm is looking to lease would be for less than $30 per foot, a company source said.

In a similar move, this spring, Massey Knakal cut the amount of space it occupies in its Queens office at 118-35 Queens Boulevard in Forest Hills by about half, Krasnow said. Using a clause in its lease that gave it the right to reduce its space, it shrunk from more than 12,000 square feet to about 6,000 or 7,000 square feet. The exact amount was not immediately available.

 

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