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