Brooklyn Loses 'Stepchild' Status

By YAFFI SPODEK

Buying Brooklyn's tallest office building wasn't a well-timed move by SL Green Realty Corp.
The company, Manhattan's largest office building owner, bought 16 Court St. in 2007 at the peak of the market paying a pricey $107 million for the mostly vacant tower. Since then the landlord has had to deal with the global financial downturn and a plunge in the building's value.

 

16 Court St. in downtown Brooklyn. 

But lately the 38-story building's fortunes have been improving. Its occupancy has increased to 85% from 19.4% in 2007 with a mix of new tenants in businesses, some not ordinarily attracted to downtown Brooklyn.

In its most recent deal, 16 Court achieved the ultimate in success for Brooklyn office buildings: attracting a tenant from Manhattan. After more than a century in lower Manhattan, BlumbergExcelsior Inc., a nationwide supplier of specialized legal software, signed a lease for 12,420 square feet. It plans to move its 50 or so employees to 16 Court by the spring.

"Brooklyn no longer has the stepchild status to Manhattan," says Robert Hebron, of Ingram & Hebron Realty, the exclusive leasing agent for 16 Court. "It's become a different place."

A view of the street level.

The downtown Brooklyn office market, an accumulation of stodgy second-class buildings near Brooklyn Borough Hall, is beginning to see the benefit of the borough's renaissance as a place to live, visit and find world-class entertainment. In recent years thousands of new apartments have been developed, and national retailers and hotel companies have added locations in the surrounding neighborhoods.

The Barclays Center made headlines recently when it opened nearby with a Jay-Z concert. The 18,000-seat arena is the new home of the Brooklyn Nets basketball team.

Owners and brokers say that, thanks to these improvements, many Manhattan-based companies no longer see Brooklyn as a second-class address. Meanwhile, rents in Brooklyn remain a lot lower than those in Manhattan, a powerful incentive during tough economic times.

"We would have stayed in TriBeCa for under $30 a foot, but it was impossible to find a space for that price," says Bob Blumberg, chief executive of BlumbergExcelsior.

According to Cushman & Wakefield, average Brooklyn rents were $28.83 in the third quarter, compared with $39.83 in downtown Manhattan and $66.42 in Midtown. Meanwhile, the Brooklyn vacancy rate declined to 8% as of the end of September, down from 11% at the end of 2011. The Brooklyn statistics includes Dumbo and the MetroTech Center, as well as the downtown markets, which total about 15 million square feet.

To be sure, the real-estate industry has heralded the turnaround of the downtown Brooklyn office market in the past, only to see it fizzle. The area is still being hurt by the overall weak economy that has slowed leasing citywide, as well as the decrepit condition of some of its buildings.

But brokers and owners say there are reasons to be bullish about Brooklyn other than the new arena, hotels, stores and condos. The Dumbo market has become so hip among start-ups and technology companies that there is practically no vacant space there.

Some of that demand is beginning to spill over into downtown Brooklyn, brokers and landlords say. "We're seeing some signs of different businesses and tech businesses looking at space," says Steven Durels, SL Green's director of leasing.

Also, a game-changing deal in downtown Brooklyn was sealed earlier this year when New York University agreed to rent 370 Jay St. for a school of applied science. The 61-year-old building was the former headquarters of the Metropolitan Transportation Authority and is mostly vacant.

The deal will result in a major upgrade to the unused property in the heart of downtown Brooklyn. It will also bring students and faculty and possibly spinoff businesses to the area. "That creates a buzz," says Glenn Markman, executive vice president at Cushman & Wakefield.

Downtown Brooklyn has benefited by a wave of economic development initiatives that stretch back to the development of MetroTech starting in the 1980s. The city also has made zoning changes and offered tax breaks and other incentives to encourage development.

"Brooklyn is going to have people looking at it as a first choice, rather than as an alternative, less expensive choice," says Steven Spinola, president of the Real Estate Board of New York. "If the Nets can do well in the season, that will also help speed along the process."

 http://online.wsj.com/article_email/SB10000872396390443615804578042702351881838-lMyQjAxMTAyMDIwNzAyODc3Wj.html?mod=wsj_valettop_email

City Takes Up Zoning Changes to Erase Downtown Brooklyn’s Glut of Parking Spots

 By: Thomas Kaplan

300 Livingston Street


In traffic-clogged New York City, where parking spaces are coveted like the rarest of treasures, an excess of parking spaces might seem like an urban planner’s dream.

Yet city officials, developers and transit advocates say that in Downtown Brooklyn, there is this most unusual of parking problems: There is simply too much of it.

The issue, officials say, lies with the large garages that the developers of new residential buildings have been required by zoning rules to construct. But with 13 subway lines and 15 bus routes in the area, many new residents choose to leave their cars behind, meaning the garages sit half-empty and take up precious space.

“People are choosing to live in Downtown Brooklyn because of the great access to the public transit network that they find there,” said Tucker Reed, the president of the Downtown Brooklyn Partnership. “The last thing we need to be doing is developing more parking.”

The city is now seeking to rein in what it sees as a glut of parking. On Monday, a City Council panel is scheduled to consider new zoning regulations that would reduce how many parking spaces must be built with new residential developments in Downtown Brooklyn, and allow developers who already have excess parking to reclaim the unneeded space for other uses. (Because there are so many subway tunnels and other infrastructure in that part of Brooklyn, many of the garages are above ground, making it easier to use the space for something else.)

Residents in Downtown Brooklyn are likelier than those in many other neighborhoods to go car-free: 22 percent of households in the neighborhood own cars, according to the Census Bureau, compared with 45 percent for the city over all.

In making the case for reducing the parking requirements, the city’s Planning Department cited the Avalon Fort Greene, a high-rise on Gold Street with more than 600 units. Under the current rules, the building was required to have more than 250 parking spaces, but the city said barely one-third of them were being used.

Paul Steely White, the executive director of Transportation Alternatives, said residents moving into the area, particularly younger ones, wanted nothing of the “car-oriented suburban lifestyle of their parents.” He called the proposed changes a step in the right direction by city officials.

“We hope they go even further to tip the balance even more in favor of transit, walking and, increasingly, bicycling,” Mr. White said.

Under current rules, developers of new residential buildings in Downtown Brooklyn must provide parking spaces for at least 40 percent of households. The minimum parking requirement would drop to 20 percent under the new rules, and there would be no requirement to build parking with subsidized housing units, a move that supporters said would reduce the cost of building such units.

The proposed rules were approved by the City Planning Commission last month, and they will go before the Council’s Subcommittee on Zoning and Franchises on Monday.

Councilwoman Letitia James of Brooklyn said there was no question that Downtown Brooklyn was a “transit-oriented community.” But she said she was concerned that parking could become more difficult to find because of the opening of the Barclays Center, and she added that she was not convinced it was a good idea to allow developers to get rid of excess parking they had already built.

“They would turn it into more luxury housing,” Ms. James said, suggesting that it was naïve to think developers would volunteer to turn their extra parking into subsidized housing or a community space.

In his review of the city’s proposal, the Brooklyn borough president, Marty Markowitz, called for the zoning rules to be adjusted not only to reduce the requirement for automobile parking, but also to increase the requirements for providing bicycle parking by 50 percent.

Mr. Markowitz said his proposal demonstrated the wrongheadedness of “erroneous claims from critics that my office doesn’t advocate enough for the bicycle community.” But the Planning Commission concluded that requiring additional bicycle parking was beyond the scope of the zoning changes that were being considered. 

 http://www.nytimes.com/2012/11/26/nyregion/seeking-to-rein-in-excess-parking-in-downtown-brooklyn.html?partner=rss&emc=rss&_r=1&