What To Expect As Dumbo Embarks On A New Era
This week, Vornado, Silverstein Properties and other big-name firms placed bids on a slate of Dumbo properties owned by the Jehovah’s Witnesses. We caught up with the four developers who’ll comprise the Dumbo panel at our Brooklyn’s Hot Projects And Neighborhoods event on March 1 to get their read on the neighborhood and the impact they’re aiming to have.
When Bisnow visited Midtown Equities, Rockwood Capital and HK Organization’s Empire Stores office conversion last summer, the rooftop addition was in the early phases of construction. Since then, the 50k SF space that’s now enclosed in glass has nabbed a tenant: Los Angeles-based ad firm 72andSunny.
Midtown Equities’ Jack Cayre tells us why that matters: they’re among the first national office tenants to move their NYC operation across the river to Brooklyn. Jack says we should expect more of that as the quality of office space in the area keeps going up, and as more services and amenities, like the 55k SF of new retail coming to Empire Stores, help fill in the remaining gaps in services and amenities.
As of now, 170k SF remains to be filled at the project, and anchor tenant West Elm’s in the process of building out its 150k SF spread. Jack says well-respected creative media and technology tenants have inked deals here, and it will become a safer place for other companies to move without the fear of being first.
The neighborhood’s recent history has been largely one of residential conversion projects. The latest of those is Megalith Capital’s conversion of an old Brillo factory at 200 Water St. Like Manhattan office tenants venturing to Brooklyn and often landing first in Dumbo, Megalith principal Phil Watkins says buyers at the project include many coming from Manhattan who’d otherwise be looking in areas like Tribeca or Chelsea.
But take note: Phil points out that at least one of his buyers works right in the neighborhood. It’s the kind of full-service mixed-use vibe that Phil says the area had potential for, but didn’t quite embody until recently.
The ability to walk to work is among the chief draws of the neighborhood for Alloy Development EVP AJ Pires. He does it every day.
Out of its Dumbo office, Alloy’s working on One John St, its fourth project in the neighborhood. AJ says those Dumbo roots probably helped Alloy nab a bid for the site in 2013, when it was up against 10 other developers who responded to a public RFP.
The site directly abuts the newest section of Brooklyn Bridge Park, and proceeds from sales will help pay for the park’s maintenance. And those proceeds are starting to roll in. The project made a splash last September when it broke a Brooklyn record for most expensive condo unit ever sold in the borough with a penthouse that traded for $8.8M.
It took decades for the neighborhood to become synonymous with high-end luxury housing and office space, and LIVWRK founder & CEO Asher Abesera credits what David Walentas did in the neighborhood dating back to the ‘80s, when Two Trees Management began buying and converting old warehouses for residential use.
In 2013, when LIVWRK and its partners, Kushner Cos and RFR Realty, picked up the six-building, 950k SF portfolio that’s now Dumbo Heights, Asher says they went against the prevailing wisdom that said office development in the area wouldn’t make financial sense.
“We sort of established Brooklyn office rents that start with a five,” he says. A round of new leases the closed this past December asked in the upper end of the starts-with-a-five range. But Asher says it’s not really about the numbers.
“Everyone likes to credit developers,” he says. “But it’s really every end user, every employee coming into an area and giving it new life.”