The Real Deal New York

Major finance firms are now targeting Brooklyn, says Industry City leasing director

The borough's office market has lagged, but that could be changing, panelists say
By Eddie Small | October 19, 2017 04:05PM

Clockwise from top left: Industry City, Building 77 at the Brooklyn Navy Yard and 47 Hall Street

Manhattan has long reigned as the financial center of the country, but as Brooklyn’s unprecedented real estate boom continues, some large finance companies are looking across the East River for a possible home, according to Industry City leasing director Kathe Chase.

“I would say in the past 18 months, three of four major financial services firms have come out to look for in excess of 200,000 square feet,” she said, “because they’re trying to attract this other sector of the labor force now.”

Chase sat on a Thursday morning panel in Downtown Brooklyn’s Pioneer Building with Heritage Equity Partners CEO Toby Moskovits and Brooklyn Navy Yard CEO David Ehrenberg for a discussion on Brooklyn real estate that focused largely on office properties. Although Moskovits described the borough’s current boom as a “once in a 100-year economic transformation,” moderator Robert Gilman asked why this has not yet translated into a large amount of major office tenants coming to Brooklyn.

Ehrenberg attributed it to space issues, and Chase maintained that this could be changing soon. Although she acknowledged they had not managed to close with any of the big finance companies yet, she said they were being drawn to the borough because of its reputation as a creative business hub with workers whose skills were now more beneficial to their companies.

From left: Kathe Chase, Toby Moskovits, David Ehrenberg, Robert Gilman

“The traditionally institutional firms who are looking for young people to work for them—the millennials, the tech savvy labor force—they’re now looking in Brooklyn,” she said.

There are only a few office buildings in the borough that appear a decent fit for large financial firms, including Building 77 in the Navy Yard, Tishman Speyer’s redevelopment of the Macy’s in Downtown Brooklyn, and RXR Realty and Westbrook Partners’ TRData LogoTINY 47 Hall Street.

Attracting more traditional and institutional companies like these will be key to Brooklyn’s future, according to Ehrenberg, as people and businesses thinking about moving to the borough will first need to realize that it is a serious place for people to live and work, not just a playground for hipsters.

He warned that the borough cannot become a parody of itself for growth to continue.

“People want the authenticity. They want the realness,” he said. “There is an element, like, how many artisanal mayonnaise companies can one have in the borough?”

Choice New York Management co-founder Michael Feldman, who sat on the residential panel at the Bisnow event, said the young people in his own family had helped him understand that Brooklyn’s cool factor is one of the biggest draws.

“I have a few little 20something cousins, and I said, why did you move all the way to East Bushwick? Did you think about Queens?” he said. “They said, ‘Queens isn’t cool. Brooklyn is cool.’”