While it’s unlikely Brooklyn will ever replace Manhattan as the center of business in New York City, there’s a lot to be said for what the city’s most populous borough offers commercial and industrial tenants. Its diverse character, available space and network of transportation options, from subways to ferries to highways, as well as its increasing abundance of bike lanes, make it home to a growing commercial workforce across various industries. Brooklyn is quickly offering more unique and flexible spaces that can nurture growing businesses and sustain commercial activity for large players.
Sunset Park is a great example. The area features bustling industrial and office buildings lining the waterfront, and companies from all sectors are finding that more spacious offerings closer to where much of NYC’s workforce lives, such as Liberty Bklyn’s up-to-850,000 square feet of space, can enhance their business in the current environment.
Industrial property remains a top-performing asset class in New York’s outer boroughs, according to recent research by Cushman & Wakefield. Vacancies are actually lower than before the pandemic. During Q3 2019, the industrial vacancy rate in the outer boroughs was 5.2%. It’s now projected to be 4.5% for Q3 2020, below the national rate of 5.3%. According to the Bureau of Labor Statistics, logistics hiring is also spiking nationally, and CBRE reported recently that Q3 industrial leases in New York City are up 71% from the same time last year in NYC.
You can see this first-hand in Brooklyn, which is a popular area for last-mile distribution centers, bolstered by months of lockdown and e-commerce. Brooklyn — and Sunset Park specifically — is perfectly situated for delivery traffic to much of the five boroughs, Long Island and New Jersey. Similarly, it offers manufacturing and office space where companies can find expansive leases. Sunset Park is emblematic of this with its truly diversified array of companies that call it home.
The pandemic pause caused widespread layoffs throughout the boroughs, and Brooklyn was no different, with unemployment reaching a peak of 20.5% in July. It has since recovered steadily with approximately 14% unemployment as of September (1.1 million Brooklyn residents are counted as part of its labor workforce, or about 43% of its total population, according to BLS data).
Sunset Park is targeting industrial employment through its local economic development organization Southwest Brooklyn Industrial Development Corp. (SBIDC) and the city-run Workforce1 Industrial & Transportation Center (ITC), which focuses on industrial and transportation jobs. Liberty Bklyn (located at 850 Third Avenue in Sunset Park) and others are poised to elevate a rebounding workforce, with its footprint in one of the borough’s most industrious neighborhoods. Tenants taking space will benefit from the building’s payment in lieu of taxes (PILOT) program, minimizing taxes for years to come, and will also be eligible for economic incentives including the Relocation and Employment Assistance Program (REAP), the Industrial Business Zone Relocation Credit (IBZ) and Industrial & Commercial Abatement Program (ICAP).
Commercial Properties Abound
With the acceleration of remote work, the need for office space is being re-examined — but large, flexible floors are beyond crucial to meet industrial and warehouse output, as well as to cater to the needs of a workforce that increasingly seems to miss the office. With social distancing, expansive floorplates are more important than ever.
Additionally, in the age of Zoom and remote working, companies need cutting-edge IT capabilities for communication and server access. Redeveloped Brooklyn properties like Liberty Bklyn are offering new fiber-optic capabilities with redundancy to ensure firms don’t miss a beat with their distributed workforces and client bases.
The pandemic has rapidly accelerated changes to the way we work, regardless of industry, while heightening demand for buildings with spacious office, industrial and logistics availabilities. Brooklyn and Sunset Park in particular are situated to empower companies, enable future growth and fuel New York’s commercial rebirth.
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