The New York City office real estate market experienced a slow start to 2017, but Brooklyn seems to be making gains on Manhattan, with several projects scheduled for completion in the coming months.
The 2017 New York City Quarter 1 Office Report, just released by Commercial Café, analyzes the New York City office investment market (of properties over 50,000 square feet) recorded up until April 10, 2017.
The report found that investment in NYC office real estate started off slowly in the first months of 2017, with a total of ten major transactions—eight in Manhattan and two in Brooklyn.
While these ten office real estate transactions totaled $2.07 billion during the first three months of 2017, total sales volume was 63 percent lower than this time last year, with an average price per square foot down 23 percent from Q1 2016 at $964 to $741 in 2017.
The report remains optimistic, adding that the improving job market is encouraging companies to expand and relocate, forcing property owners to keep up with the demand. Many are upgrading older buildings to meet the need.
Midtown Manhattan remains the most popular area for office real estate—breaking records in 2016 for price-per-square-foot—helping New York City maintain its title as one of the world’s most expensive office markets for both rentals and sales.
The largest sale in the first quarter of 2017 was at 60 Wall Street in lower Manhattan which closed for $1.04 billion.
Meadow Partners paid $54 million for 57 Willoughby Street in Downtown Brooklyn, a property previously owned by Helen Keller Services for the Blind.
The second highest Brooklyn property transaction was at 185 Marcy Avenue in Williamsburg. Acuity Capital Partners purchased the six-story, 70,000-square-foot building for $30 million.
The only new office project development to be completed in New York City in Q1 was also in Brooklyn, at 2361 Nostrand Avenue in Midwood.
Several major office projects are already in progress for the second quarter, with three in Manhattan and five in Brooklyn. The report notes that all these Q2 projects are adaptive reuse projects, which are significantly less expensive than new ground-up developments.
The redevelopment of historic 10 Jay Street, the former home of Arbuckle Brothers sugar refinery in DUMBO is scheduled to debut May 31, 2017. The 254,500-square-foot facility will offer modern office and retail space.
The other four industrial-to-office conversions in Brooklyn scheduled for completion in Q2 2017 are:
Brooklyn Navy Yard, Building 77 at 63 Flushing Avenue, Pioneer Building at 41 Flatbush Avenue, and Turbine at 29 Ryerson Street, all scheduled to be completed April 30, 2017.
The Jefferson, located at 455 Jefferson Street is scheduled to be completed June 30, 2017.
Check out Commercial Cafe’s full NYC Q1 Office Report here.