In what appears to be a positive sign for the Brooklyn office market, the developers behind the William Vale Hotel have inked their first tenant for the five-story office portion of the building.
New York Studio Factory, a Brooklyn-based provider of creative studio space, will be taking up 17,000 square feet of community facility space across two floors in the building, at 55 Wythe Avenue in Williamsburg. Brendan Thrapp, senior director at Brooklyn-focused brokerage EXR, represented both landlord and tenant in the deal.
Though the community facility designation makes this lease somewhat unique, it’s a small jolt for Brooklyn’s office market, where concerns have been raised recently over a slowdown in leasing activity. The 500,000-square-foot new office development at 25 Kent, just a block away, has yet to announce an anchor tenant, though one of the developers of that project is making an office play in Greenpoint.
“I think that there is actually more demand than there is product, specifically in Williamsburg, for offices for creative, well-funded, substantially-sized TAMI tenants,” EXR co-founder Mario Faggiano said. “The unique thing here is that it’s a community facility, but if it weren’t, we could be definitely be getting 80 a foot doing five thousand square feet for a really well-qualified company.”
One challenge facing 25 Kent, he added, was that individual creative and startup tenants generally don’t need large spaces of the kind on offer at that development, where minimum square footage per lease is around 12,000.
Another recent EXR project, the Hecla Iron Works at 100 North 10th Street, managed to lease out quickly by catering to a variety of creative tenants, including a modeling agency and interior design firm, Faggiano said.
New York Studio Factory was founded in 2003 by Joseph Woolridge, then a student at Cooper Union. Over the years, the firm’s major leases have included 16,000 square feet at 44 Stewart Avenue in East Williamsburg, and 13,000 square feet at 2 St. Nicholas Avenue in Bushwick.
Developers Yoel Goldman and Zelig Weiss each own 50 percent of the 183-key William Vale Hotel, which opened in 2016 and includes 38,000 square feet of retail space on its bottom two floors. Retail tenants include luxury custom suitmaker Suitsupply, a Du’s Donuts and Coffee shop by celebrity chef Wylie Dufresne, and a brewery run by former child actor Dylan Sprouse.
The hotel made history in 2017, when Goldman’s All Year Management used it to guarantee a $166-million bond offering on the Israeli bond market, the first such bond by a U.S. company to be guaranteed by a first mortgage on a single asset. All Year’s Israeli bonds fell sharply last year, and bondholders have sued the developer. He landed financing to finish the Rheingold Brewery rental megaproject in Bushwick, but paid more than he originally anticipated. He’s also in contract to sell a Gowanus site to the Rabsky Group for $95 million.