What Is Morgantown? Brooklyn's Next Creative Office Hub, That's What.
The borderlands straddling East Williamsburg and Bushwick don’t scream “office district” to most, but a growing list of developers are letting building permits and earth movers do the screaming for them, and tenants are starting to listen.
In that pipeline is 13 Grattan St, which sits across the street from an exit on the L train at the corner of Bogart Street, the de facto main drag of an area that’s become known as Morgantown—either because it’s on the Morgan Street stop on the L train, or because nobody could agree on whether it’s part of Bushwick or Williamsburg.
Rialto Real Estate is preparing to break ground on the 40k SF office and retail building before the end of this month. Rialto’s Ted Hovivian tells us he’s already had one tech tenant interested in taking the whole building, but “in addition to wanting my left arm and my right arm, he also wanted my first born,” so the deal was not to be.
Whoever occupies it, Ted says the glass and steel building designed by Gene Kaufman will be “completely contrary to anything in the neighborhood right now.” Based on the rendering he sent us, we concur.
Ted recounts the story of buying the four-story building at 56 Bogart St and the vacant land at 13 Grattan St as a home for a commercial furniture company he and his wife, Marianne, ran. The year was 1983—before a lot of the young creative types who’ve flocked to the area were born. The scene was more than a little different then.
“Between the drug dealers and the prostitutes and everything else, you had to move quick,” Ted says.
And so it goes with real estate three decades later (the moving quick part, not the other stuff). Big-name developers have started to pounce. Just over a year ago, Savanna and Hornig Capital Partners paid $33.7M for a 160k SF former Schlitz brewery, just across Flushing Avenue at 95 Evergreen Ave, and they are converting it into office and retail space. Work on that project’s slated to wrap by Q2 of this year.
Within “Morgantown” itself, Heritage Equities is converting a 95k SF single-story warehouse into creative office space. ABS Partners managing director Ben Waller is leasing 215 Moore St for Heritage, and he tells us the plan is to eventually include a hotel on premises.
Ben puts the magic number to make an office project in the area work in the mid-to-upper $40s per SF—a range he says he was able to hit twice at 215 Moore St: first on a deal signed this past fall that’ll bring digital cartography startup CartoDB to 7,500 SF at the building, and on another lease he says is soon to be announced.
Ben also tells us he’s preparing to announce another office project in the area that he’ll be leasing.
And then there’s this: Zoning in Morgantown is either M1-1 or M1-2, which means residential development’s not in the cards anywhere in the neighborhood. Anything built or converted has to be industrial or commercial.
And things are getting built—and converted. A permit has been posted at 199 Cook St to convert the three-story warehouse building into retail and office space. And Citi Habitats’ Chris Havens will soon start leasing the office space at 456 Johnson, a 55k SF office and retail project dubbed “The Papermill,” a nod to its original use.
Chris says it's the first full gut rehab in the neighborhood for an office project, and asking rents for the office portion will be in the $40s per SF.
The rendering below is what it'll look like on the inside. The project's being developed by Sequoia Development Group, and will have office spreads ranging from 900 to 2,200 SF. Chris tells us work on the building is about 85% done. It’s set to be complete by March.
And down the street, at 333 Johnson, Normandy Real Estate Partners, Royalton Capital and Sciame Development picked up a 160k SF warehouse property for $27M last spring, with plans to convert it for—you guessed it—office and retail.
“There is no doubt in my mind,” Ben says, “that the dynamic in the neighborhood is shifting toward becoming a hub for creative office tenants.”