An office rebound in Brooklyn? A marketing plan for a unique property in Williamsburg offers only partial parallels for Site 5, still waiting for proposals.

Would Atlantic Yards/Pacific Park ever get more office space? Well, let's look at the prospects for such space in Brooklyn.

Remember, several versions of the plan--as of 2016, at least--for development at Site 5, catercorner to the arena block, included a significant amount of office space, but building office space is a question mark in pandemic-era Brooklyn. 

So it's likely that developer Greenland Forest City Partners is hedging its bets, in a proposal I'd expect to be unveiled within the next year (possibly much sooner, but everything has been delayed). 

Surely the plan for two towers, incorporating a shift of bulk from the unbuilt B1 (aka "Miss Brooklyn") tower once slated to loom over the arena, would emphasize residential space. But maybe they'd leave open the option for some office space, since that of course can be defended with "jobs."

A bit of hype

Consider the 5/30/22 New York Times article, N.Y.C. Companies Are Opening Offices Where Their Workers Live: Brooklyn. 

That's not that new a trend, actually, so the move of ustwo, a digital design studio, to DUMBO to take 11,500 square feet, or the ad firm Social Chain's 42 workers to Two Trees' 10 Grand Street, at the Domino project in Williamsburg, isn't too dramatic.

Not to be nitpicky, but the reporter found exactly two companies, both agencies, and built a story around companies moving to Brooklyn, coz….future of work 🤷‍♂️🤷‍♂️🤷‍♂️https://t.co/rrtuw6l9U9

— Rafat Ali, Media Operator & Dad (@rafat) May 30, 2022

The big picture

The overall picture is fairly bleak, the Times acknowledged:

About 19 percent of office space in Manhattan is vacant, the equivalent of 30 Empire State Buildings. That rate is up from about 12 percent before the pandemic, according to Newmark, a real estate firm. Office buildings have been more stable in Brooklyn, where the vacancy rate is also about 19 percent but has not fluctuated much since before the pandemic, Newmark said.

That is expected to get worse in Manhattan, at least, when leases come up for renewal. And Brian Steinwurtzel of GFP Real Estate called outer-borough markets “terrible.”

One test is how and when the new Brooklyn office construction, some 1.5 million square feet, gets tenant. That includes 141 Willoughby, a 24-story commercial building in Downtown Brooklyn, which has not yet announced leases.

What about Domino?

Meanwhile, the Times quoted Jed Walentas of Two Trees Management as saying he had so much confidence in the Domino project, where they're transforming a historic structure, dubbed The Reingery, into a 460,000-square-foot office building, that they're building it on spec, without an anchor tenant.

Well, Two Trees made a lot of money in DUMBO and, as a private company, can take more risks. A 8/16/22 Commercial Observer article headlined Two Trees Going Big With Domino Sugar Refinery Project reported:

David Lombino, Two Trees’ managing director for external affairs, put the price of the renovation at about $250 million, all paid by the development company. (There is a construction loan, but Lombino declined to identify the lender.) T

The CO reported 8/24/22:

M&T Bank provided a $43.8 million project loan plus a $36 million building loan for the buzzed-about Williamsburg development.

To the CO, Lombino "conceded that it would have preferred to share those costs with an anchor" and is leaving other parts of the building unbuilt, allowing a tenant to shape the completion.

It's a big lift. The CO noted:

But for all the success the borough has had in attracting small startups and midsize companies, for years now it has been unable to land the “big fish” — the 100,000-square-foot-plus tenant whose very name would take Brooklyn to another level. Think of Brooklyn as the New York City headquarters of Facebook or Google or Amazon.

And the vacancy rate has gotten worse, with CBRE calculating it as 20.8 percent, increasing to 22.7 percent in a year with expiring leases.

The Refinery Building offers a prominent location, next to a much-praised open space, Domino Park, with new apartments around it. It does not offer great public transit, which is why Two Trees supported/instigated Mayor de Blasio's failed BQX streetcar plan.

And Site 5?

Site 5, connected to the Atlantic Terminal transit hub, offers much better public transit: subways, buses, and the Long Island Rail Road.

It's within walking distance to some nice residential streets--Boerum Hill, Park Slope, Fort Greene--though the immediate location is hectic and traffic-choked. 

It could, as the developers suggested in pre-pandemic times, offer a prominent location for a company. (Remember the Panasonic pitch?) And it could offer retail/restaurants at its base. As with that concept, other amenities would likely have to be included within the tower structure, not around it.

So stay tuned. Maybe the building would be a hybrid, conceptualized for work from home. But wouldn't that work better with some green space outside?