Thursday, October 29, 2015

Forest City now said to be considering office space at Site 5 and B1 sites (really?)

Remember, Atlantic Yards/Pacific Park is a "never say never" project, and now it looks like more office space--always allowed, but ignored/downplayed for years--may be on the drawing board.

Yesterday, the New York Times's real estate page offered With Workers Living in Brooklyn, Offices May Follow:

Those who work in Manhattan and live in another borough will often talk of a job in “the city.” The slip might be understandable. Most office buildings are in Manhattan, which means many New Yorkers spend the bulk of their waking hours there.
But Brooklyn seems poised to become a serious rival for the 9-to-5 set. About 16 million square feet of office space is under construction or planned, brokers say, in an arc that stretches south from Williamsburg through downtown to Sunset Park. The properties range from single warehouses to multibuilding complexes.
Though the scale of investment, from many of New York’s largest developers, appears unprecedented, it is not risk-free. A lack of amenities and public transportation can put certain neighborhoods at a disadvantage, according to critics.
Yet supporters say it is about time the commercial real estate market caught up with a decade-long residential boom.
Supporters also want the Relocation and Employment Assistance Program (REAP), "which offers lucrative city tax credits to certain companies that trade Manhattan for Brooklyn," thus basically cutting rents by $20/sf, to be renewed.

(The article mentions that the credits can't be counted on forever, but ignores the push for renewal by the Downtown Brooklyn Partnership, steered by Forest City.)

Brooklyn and AY

Forest City Ratner's MetroTech "is more than 97 percent leased, a record high, according to [CEO] Ms. [MaryAnne] Gilmartin," the Times reports, without analyzing how the developer may have offered discounts to lure nontraditional tenants.

The Times reports:
Part of what kept MetroTech from realizing its full potential, Ms. Gilmartin said, was that people who might have worked there lived too far away; the hike from the Upper East Side every morning might not have been worth it.
That doesn't fully make sense. MetroTech was billed as back office space, less for top executives than for support staff, who couldn't afford the Upper East Side in the first place.

The article continues:
Now, though, with Brooklyn having become such a desirable residential address, corporations are in a sense following their employees, Ms. Gilmartin said. She is turning her attention to Pacific Park Brooklyn, the mixed-use development that includes Barclays Center, where apartments have been the focus to this point. There she can build as much as 1.6 million square feet of offices, though a hotel will most likely account for some of that.
That 1.6 million square feet is actually less than originally allowed on the arena block but--after having three arena block buildings designated housing--consists of the B1 tower over the arena plaza and the Site 5 tower across Flatbush Avenue.

It's unclear, as I've written, whether B1 will be built, or whether its development rights might be traded to another site, perhaps in part to Site 5. And the Site 5 tower, as I wrote recently, may be tweaked, and I speculated that it may be enlarged as some portion of the B1 square footage gets shifted.

But none of it will become office space until the REAP program gets renewed, I'm sure, and until there's an anchor tenant. (Remember the 2011 effort to lure Panasonic?)

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