Normandy Real Estate Partners and their investors in a Bushwick office conversion signed a temporary 100,000-square-foot lease with the United States Postal Service, which will use the space to make last-mile deliveries during the holiday season.
The New Jersey-based investment firm, along with Royalton Capital and Princeton Holdings, had been planning to convert the 130,000-square-foot building at 333 Johnson Avenue to attract the kinds of tech tenants that appeared as though they would flock to the borough when the investors bought the property for $26.8 million in 2015.
But technology and creative tenants haven’t ventured as far into the borough as many originally thought they would. And Normandy said it made sense to do a short-term deal while the company waits for a permanent tenant to come along, Crain’s reported.
“We are still advancing our plans to do creative office space,” Normandy principal Travis Feehan told Crain’s. “But industrial is rocking right now and we want to be flexible.”
The USPS lease will run through February. The impending partial shutdown of the L Train may be having an impact on demand from tech tenants in Brooklyn neighborhoods farther away from the waterfront.
“Because of the L train tunnel shutdown, almost all sizable tenants are being dissuaded from taking space in Bushwick right now,” TerraCRG office-leasing broker Chris Havens said. “One day, Bushwick is going to be a great little office district, but in the meantime the leasing is very slow.”
Normandy and their partners had looked to sell the property last year for $60 million.
Buildings planned for creative-office conversions like Lincoln Properties’ 445 Jefferson Street have remained vacant, while Savanna and Hornig Capital Partners leased an entire Bushwick building to the city’s Human Resources Administration at 95 Evergreen Avenue, which they had been marketing to creative tenants. [Crain’s] – Rich Bockmann