Brooklyn is no longer just a hot bed for residential real estate, the borough is now transforming its landscape to meet the needs of new office projects expected to create a competitive office market in the upcoming years, according to a new report.
JLL — a financial and professional services firm — released its Brooklyn Office Outlook 2015 report, which highlights the idea that new office projects have replaced prospective residential development in some of the most high-profile areas of Brooklyn.
According to JLL, the borough’s commercial office space is expected to grow by more than 14 percent during the next three years.
In the report, one of the developments highlighted was 420 Albee Square West — which originally was slated to become a multifamily project — will now be the first ground-up speculative office development in Downtown Brooklyn in decades. Developer JEMB Realty will erect a 475,000-square-foot, 40-story office building at the site.
Downtown Brooklyn currently has a vacancy rate of 4.0 percent – among the lowest in the country — meaning that although there is a high demand, there is a need of new office supply in the area. Other areas of Brooklyn have higher rates, such as Williamsburg with a vacancy rate of 48.3 percent and the Flushing Avenue Corridor with 26.9 percent.
Another development that changed plans was 10 Jay St. in Dumbo, which went from being a residential project to now an office space, expected to be complete by late 2016.
According to the report, the Flushing Avenue Corridor of Brooklyn will also go from its current makeup of industrial buildings, to being reimagined as close to 700,000 square feet of office, flex and retail space by 2017.
Companies have also decided to make continue calling Brooklyn home such as co-working space WeWork, which leased a 76,580-square-foot space at 195 Montague St. in Downtown Brooklyn. WeWork also has spaces in Dumbo, the Brooklyn Navy Yard and Williamsburg.
Amazon also leased a 54,250-square-foot space — to be used for light distribution and warehousing — at 850 Third Ave. in the south Brooklyn waterfront.
Based on data from the report, Brooklyn currently has about 32,863,473 square feet of office space and has 3,658,255 square feet under construction or renovation.