Will Brooklyn offices be hanging “No Vacancy” signs in a year or two?
A new report reveals that the office vacancy rate is right around 10 percent in the borough these days. And if it weren’t for a few blocks of Class A office space that became vacant over the last year, that rate would be lower.
Marcus & Millichap’s second-quarter Office Research Report advises that property owners will be able to increase asking rents by 6 percent this year to $26.95 per square foot.
However, brokers are going to be really happy with this stat: Over the last year, a median sale price of $339 per square foot was recorded in Brooklyn. That is a 27 percent increase from the preceding 12-month period.
The full release is below.
CONTINUES TO FLOURISH
BROOKLYN, N.Y., Aug. 20, 2007 – The Brooklyn office market may be beginning a transformation that will ultimately raise its profile in what would be the nation’s fourth-largest city, if it were classified as such, according to a second-quarter Office Research Report released by Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm. Vacancy continues to linger around 10 percent and would likely be lower except that a few larges contiguous blocks of Class A space became vacant over the past 12 months.
“Smaller properties with steady income streams generated from multiple uses will invariably attract buyer interest,” states J.D. Parker, regional manager of Marcus & Millichap’s Brooklyn office. “Additionally, the borough’s current residential boom should continue to encourage the purchase of buildings and sites where residential components can be added.”
The following are some of the most significant aspects for the Brooklyn Office Research Report:
· In the borough of Brooklyn, 5,700 new jobs are expected to be added by year’s end, a 1.2 percent increase. Office-using employment is expected to expand by 1,600 positions by year’s end.
· Approximately 150,000 square feet of office space is under construction and expected to be delivered this year, compared with 165,000 square feet in 2006.
· A reasonably robust local and regional economy will sustain office demand, resulting in a year-end vacancy rate of 10.3 percent, the same rate as year-end 2006.
· The Brooklyn office market remains reasonably tight. As a result, owners will be able to implement a 6 percent increase in asking rents this year to $26.95 per square foot.
· The median sales price of $339 per square foot recorded over the last year is a 27 percent increase from the preceding 12-month span.
For a copy for the Brooklyn Office Research Report, as well as reports on other markets nationwide, visit our website at http://www.MarcusMillichap.com.
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