Amazon Delivers Hope to Brooklyn Office Market
Coronavirus has slowed an already lagging Brooklyn office market, but Amazon Music has signed a lease in a new Williamsburg building that has local brokers feeling optimistic.
Amazon’s music streaming service took 40,000 square feet of production space at Rubenstein Partners and Heritage Equity Partners’ 25 Kent, Business Insider reported this week.
The owners of the newly constructed, 500,000-square-foot office, industrial and retail property leased 60,000 square feet of industrial space to streetwear brand Kith last December, and then it inked a 12,000-square-foot deal for a brewery with Randolph Beer. But its office leasing has been slow thus far, despite Rubenstein execs’ claims that they were chatting with tech and coworking companies last year.
So Amazon Music’s lease—along with the recent office deal for ad firm Mother New York in Gowanus—helps bolster optimism in the Brooklyn office market. Perhaps commercial tenants will want to pay pricey new-construction rents in Williamsburg, the Brooklyn Navy Yard or Downtown Brooklyn after all.
“I’m not surprised,” said Ofer Cohen, founder and president of Prospect Heights-based brokerage TerraCRG. “It’s consistent with everything we thought about the market and about Amazon needing to be here. Companies like Amazon have for years had the understanding that the creative media talent lives and loves Brooklyn. Williamsburg is one of the fastest-growing millennial clusters in the country.”
He added that 25 Kent, with its unique ziggurat shape and amenities, was always “going to be an anchor for Williamsburg. There’s really nothing else like it in the neighborhood.”
Dan Marks, a partner at TerraCRG, predicted that Brooklyn would benefit from workers’ desire to stay closer to home during the pandemic.
“People are going to want to go back to an office, but they’re not going to want to go back to an office in Manhattan,” he explained. “Brooklyn does not depend on incoming office workers coming from outer boroughs and other states for its vitality. Most of the people that live here work here too.”
Brendan Thrapp, who oversees commercial leasing at brokerage EXR, lives and works in North Williamsburg. He acknowledged the lag in leasing at big new-construction office projects like 25 Kent.
“It was a challenge to get large floorplates leased in Williamsburg in the past,” he said. “COVID is helping push that a little further along than it would have been.”
He predicted that a lot of larger companies would start leasing modestly sized spaces in Brooklyn, so their employees would be able to walk or bike to work rather than taking the subway to Midtown.
“I think you’ll see a lot of relocations to Brooklyn and a lot of satellite offices for employees that don’t want to come into Manhattan,” Thrapp said. “I think Williamsburg is the perfect place for that, as well as Dumbo. What remains is whether the pace of 60,000-square-foot headquarter leases continues.”
With so many arts and cultural venues shuttered, “Manhattan is a little eerie,” said Thrapp. “Now I think Williamsburg has caught up to a lot of those [Manhattan] markets in terms of, ‘Where are employees going to eat lunch? Are there parks?’ And you have these after-work venues like Brooklyn Bowl.”