UPDATED, Feb. 5, 9:48 a.m.: The private sector pumped more than $6 billion into Downtown Brooklyn since the neighborhood’s rezoning in 2004, according to a new report by the Downtown Brooklyn Partnership. And with another $4.2 billion soon to line the area’s coffers, it is poised for heaps of action on the residential, office, retail and hospitality fronts.
There are 12,500 residential units planned or under construction in the neighborhood, out of which 3,400 are affordable, according to the report, which was released today by the pro-business coalition that manages three of the area’s business improvement districts. Among the major projects in the pipeline is AvalonBay’s 57-story, 826-unit rental building at 100 Willoughby Street, which is set to eclipse 388 Bridge Street as Brooklyn’s tallest residential tower.
The average sales price for new construction units in the third quarter of 2014 was north of $1.5 million and worked out to over $1,000 per square foot. That is far above the Brooklyn Heights average sales price of $725,503, but still trails Carroll Gardens, Dumbo, Prospect Heights and Fort Greene, the report states.
On the commercial front, office vacancy rates in Downtown Brooklyn are at 3.4 percent, according to the report. The neighborhood is seeing an influx of technology, advertising and media (TAMI) tenants, but it was JP Morgan, a blue-chip financial tenant, that made the biggest impact, relocating more than 2,000 employees from Lower Manhattan to MetroTech Center.
The report cites a “hidden crisis” of shrinking office space in the neighborhood—less than two million square feet of office space has been added since the 2004 rezoning, it states, not nearly enough to keep up with rising demand and the growth of the technology sector. Residential and office growth in the neighborhood have followed very different paths than those the city envisioned at the time of the 2004 rezoning, as The Real Deal reported.
“Unless office space is created to address this need, Brooklyn, as a borough, risks losing jobs to other cities,” the report states. It calls on landlords to repurpose over 200,000 square feet of underutilized office space on the upper floors of buildings and urges developers to break ground on new office projects.
In the retail sector, rents on Fulton Street hit $300 per square foot, the highest in the area, according to the report. City Point, Acadia Realty Trust and Washington Square Partners’ 1.8 million-square-foot mixed-use megaproject, will contain the area’s largest retail development, a 675,000-square-foot space which will be anchored by a Century 21 department store.
In the hospitality sector, the neighborhood has added six hotels since 2004 and has nine others planned or under construction. The Hampton Inn, which opened in July 2014, is the first Hilton Worldwide portfolio hotel to open in Brooklyn.