Spec office development picking up in outer boroughs

"Organic" tenant demand driving increased investment: JLL

New York /
Apr.April 29, 2015 03:40 PM

Office tenant demand in Brooklyn and Queens has increasingly made speculative commercial development in the outer boroughs an option for developers, according to JLL.

“Organic” tenant demand from companies like Etsy and Huge has driven developers and investors alike to broaden their focus to office developments in the boroughs, JLL’s Max Herzog told the New York Observer.

The likes of RXR Realty and Quinlan Development Group are among the market players who have recently invested in Brooklyn office developments, with tenants looking for “loft-like” spaces close to the millennial workforce’s preferred residential neighborhoods, the newspaper said.

Class A vacancy in Downtown Brooklyn dwindled to 3 percent in the fourth quarter of 2014, according to JLL’s numbers, with average asking rents up 40 percent year-over-year to just over $42 per square foot. Vacancy in Long Island City was at 3.7 percent, with average asking rents up more than 35 percent from a year earlier to $30 per square foot.

In comparison, the office vacancy in Manhattan stood at 9.5 percent in the fourth quarter, according to JLL. [NYO]Rey Mashayekhi


Related Articles

arrow_forward_ios
Flight to quality in office real estate leaves trophy buildings the only winners
Flight to quality in office real estate leaves trophy buildings the only winners
Flight to quality in office real estate leaves trophy buildings the only winners
RXR Realty CEO Scott Rechler and 475 Clermont Avenue in Brooklyn (Getty, Douglas Elliman)
RXR gets $143M refi for Brooklyn apartment complex
RXR gets $143M refi for Brooklyn apartment complex
511 Barry Street and CenterPoint Properties CEO Bob Chapman (CBRE, GI Partners)
CenterPoint buys second warehouse in Hunts Point
CenterPoint buys second warehouse in Hunts Point
Nick Mastroianni II. and Nassau Coliseum at 1255 Hempstead Turnpike, Uniondale, NY (Wikipedia and Nick Mastroianni)
Can Nick Mastroianni pull off Coliseum project?
Can Nick Mastroianni pull off Coliseum project?
JLL CEO Christian Ulbrich and JLL Income Property Trust CEO C. Allan Swaringen (JLL, iStock)
JLL arm buys $560M stake in single-family rental portfolio
JLL arm buys $560M stake in single-family rental portfolio
JLL purchases artificial intelligence startup
JLL purchases artificial intelligence startup
JLL purchases artificial intelligence startup
RXR CEO Scott Rechler (Getty, iStock)
RXR Realty requires staff, visitors to be vaccinated
RXR Realty requires staff, visitors to be vaccinated
Scott Rechler, CEO of RXR Realty and The Real Deal's Amir Korangy
Coffee Talk: Scott Rechler on beating the pandemic
Coffee Talk: Scott Rechler on beating the pandemic
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...