Tuesday, January 18, 2011

Panasonic HQ to unbuilt Atlantic Yards tower? There's nearly three times as much vacant space at MetroTech

Last week, as rumors surfaced that Panasonic might move its headquarters from New Jersey to Brooklyn--and Forest City Ratner's extant MetroTech or yet-to-be built Atlantic Yards office towers--I suggested that the tower at AY's Site 5 might be a better destination than Building 1.

However, given available space at MetroTech, that seems like a more likely destination. Panasonic needs 250,000 square feet. Crain's, in a 1/16/11 article headlined Office vacancies grow in boroughs outside Manhattan, reports:
Downtown Brooklyn saw the largest setbacks: NYSE Euronext moved out of roughly 387,000 square feet at 2 MetroTech Center, and J.P. Morgan Chase left about 352,000 square feet at 4 MetroTech...

And because tenants in the outer boroughs tend to seek smaller spaces, leasing up emptied offices takes longer than it would in Manhattan. For instance, the tenant taking the most new space in the boroughs last year was the city's Department of Information Technology & Telecommunications, which took 72,000 square feet at 2 MetroTech.
That means there's some 739,000 square feet available at MetroTech, nearly three times the amount Panasonic needs.

Sure, they'd prefer to be flagship tenants in a building, but wouldn't existing space be cheaper? It would, unless the city offered additional subsidies.

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