Office Leasing Shows Signs of Life in Brooklyn

Office leasing is taking off at one property in Downtown Brooklyn. Brookfield Properties has signed three new leases and several lease renewals at MetroTech Center, a 5.5 million square-foot mixed-use complex with access to 13 subway lines and a 3.5-acres public park. The lease transactions total 132,000 square feet.

HeartShare Human Service of New York signed a lease renewal for its 32,696-square-foot space with a 19-year extension; SoulCycle has extended its outdoor studio through June of this year; JLL signed an 11-year lease deal to manage Orchard Workspace, a co-working space that features UV air purifiers, mobile dividers, a micro-market for food and beverage offerings; and The IRS renewed its 48,000-square-foot lease. This is in addition to the complex’s growing roster of tenants, which includes Slate, Magellan Health, Think! Architecture and Design, Uniworld Group, Stratasys MakerBot and JPMorgan Chase.

Mark Kostic, SVP of asset management and leasing at Brookfield Properties says that the property has everything that tenants are looking for, like transit, local shops and restaurants and open space, which is why it has seen such strong leasing activity. “Despite the pandemic, we continue to see strong leasing activity and interest at MetroTech and throughout the Brookfield commercial and retail portfolio,” he said about the leasing activity at the property.

This activity is particularly impressive compared to neighboring Manhattan. A report at the end of last year from Colliers International found that office leasing activity declined 55% from October and 80% year-over-year. Manhattan had only .79 million square feet in lease transactions in November, compared to 3.58 million square feet in November 2019, and the market had increasing vacancy rate for six straight months, growing to 13.5%.

There has been a big disparity in the leasing activity. Midtown has consistently outperformed the market through the pandemic. In November, leasing activity increased 30% month-over-month, although it was still down nearly 70% year-over-year. On the other hand, leasing activity in Midtown South and Downtown decreased during the month of November.

By January, however, activity started to turn. Manhattan leasing activity increased by 18.6% in January, reaching 1.90 million square feet, the highest mark since July 2020. Despite the boost in leasing activity, leasing volume was down 47% compared to January 2020 and well below the pre-pandemic average monthly volume in 2019 of 3.58 million square feet, according to Colliers International.