Brooklyn’s Industry City Leases Like Crazy
Owners of Industry City in Brooklyn’s Sunset Park suffered a setback last year when a progress-loathing city council member torpedoed a rezoning that would have allowed a few more buildings to rise on the site of 35 acres.
But owners Belvedere Capital, Jamestown and Angelo Gordon Co. have ignored the disrespect, at least for now (the rezoning was never voted on but was withdrawn by the developers when they did. since that would fail).
“We are looking to the future, not the back,” said Andrew Kimball, general manager of Industry City. He preferred to focus on the huge strides made by the 16-building, 6-million-square-foot waterfront complex since it opened in 2013.
Industry City has leased an impressive 800,000 square feet of space – office, light manufacturing, studio and retail – since March 2020, the local low point of the pandemic.
Agreements with dozens of new tenants have brought the complex to over 80% tenants. Recent and new arrivals include 60,000 square feet for Porsche and Volvo with showrooms as well as service centers, West Elm, a longtime tenant who has added a 10,000 square foot retail store, and the production company The Garage, specializing in advertising for brands. like Coca-Cola, Hershey’s and Cadillac.
Kimball said: “It’s really amazing. Of the 4 million square feet we have rented since 2013, the 800,000 in the past 18 months is the most we have done in an 18 month period. And that was during the global pandemic. “
He attributed the success in part to the $ 450 million invested by the partners in new infrastructure for century-old historic buildings on the site, a former shipping and heavy manufacturing hub. The improvements included the creation of five acres of outdoor public space.
Another factor is that “we’re finding that people want their desks next to their industrial and manufacturing spaces,” Kimball said. For example, Danny Meyer’s Union Square Hospitality Group rents 20,000 square feet of office space in a 70,000 square foot commissary, all in one building.
Tenants have gone from 150 in 2013 to 575 today. “Of these, 400 are less than 2,500 square feet. We are an amazing incubator for small businesses, ”said Kimball. Some 9,000 people now work in the complex compared to 2,100 in 2013.
Industry City’s success is comparable to that of Brooklyn’s other major industrial park, the Brooklyn Navy Yard. But unlike Navy Yard, which is city-owned and subsidized, Industry City is fully privately owned and funded and more user-friendly.
Kimball’s optimism extends to the new city administration. “I feel great about it,” he said. ” I worked with [former Brooklyn borough president] Eric Adams for many years, both at Navy Yard and Industry City, ”he said. Kimball was previously CEO of Navy Yard Development Corp.
“He cares deeply about economic development,” Kimball added. I hope Eric really sees the value of this type of job creation.
It was a slightly scaled-down but no less joyous Fried Frank estate holiday party at Cipriani 42nd Street last week. Despite a small guest list, the annual industry explosion – on hiatus last year – was a full-scale affair with tons of free-flowing food and liquor.
The president of the law firm, Jonathan Mechanic, greeted the arrivals with effusion as in the past.
Guests were required to present proof of vaccination as well as negative Covid-19 test results dating back less than 72 hours. Among the unmasked attendees: Rob Speyer of Tishman Speyer, who oversees the restaurant revival at Rockefeller Center, Tony Malkin of the Empire State Realty Trust, whose flagship skyscraper lights up the night sky, and L&L President David W Levinson, the driving force behind the rapidly changing times. Square TSX Hotel Project.
Jason Kollander of MSD Capital, Bruce Mosler of Cushman & Wakefield, Morris Bailey of JMB Realty of JMB Realty, Michael Rudin of Rudin Management, Roy March of Eastdil, Chris Lee of KKR, Michael Franko of Vornado, Scott Rechler of RXR, Amy Rose de Rose, Silverstein Marty Burger of Properties, John Klopp and Lauren Silverman of Morgan Stanley, and the leasing gods of CBRE Mary Ann Tighe and Stephen Siegel.
“I appreciated that everyone joined with us in charting the way forward, supporting our city and our industry by coming together and celebrating our renewal,” Mechanic said.
If you are in the restaurant business, having friends in real estate pays off. Simon Oren, owner or partner of twenty Manhattan restaurants, knew two years ago that the building that had housed his popular Café d’Alsace for 16 years at 1695 Second Ave. was threatened with demolition.
He started looking for a new location because the pandemic delayed the teardown, but the fate of the bistro remained in limbo. Then, in October 2020, Richard Fodera, the owner of the former Writing Room space a block north – once the site of the legendary Elaine – approached Oren to tell him his own tenants were leaving.
Would Oren want to set up the Café d’Alsace there? They shook hands and quickly made a deal. The restaurant reopens with its sparkling zinc bar, terrazzo floors and multicolored vintage bottles at 1703 Second Ave. December 15th.
Zero Irving, the 21-story tower on the former Palladium nightclub site, landed its first office tenant: the fast-growing business-to-business payment platform Melio. The company signed for 25,000 square feet on floors 15 and 16.
The starting rent for the 10 year contract is in the low three digits. Melio moves from a smaller WeWork space to 18 W. 18th St. The tower has 176,000 square feet of state-of-the-art office space on the top 14 floors.
Melio CEO Matan Barr said, “We look forward to establishing our New York headquarters at Zero Irving,” aka 124 E. 14th St. The company’s online platform enables small businesses to transfer and receive payments transparently. With offices here and in Tel Aviv and Denver, it recently announced an additional infusion of funding that tripled its valuation to $ 4 billion.
Zero Irving was developed by RAL Development Services and Junius Real Estate Partners. The tower was born out of negotiations for a 99-year land lease from the city, which owns the land.
RAL Managing Director Josh Wein said the project aims to “create the optimal ecosystem for entrepreneurial businesses to grow and prosper.”
The ground floor is rented to a high-end food hall under the Urbanspace banner. Floors 2-14 are for an 80,000 square foot digital skills training center.
Office rental is managed by a JLL real estate team led by Mitchell Konsker with Benjamin Bass, Dan Turkewtiz, Kristen Morgan and Carlee Palmer. Konsker said: “Melio was drawn to the property because of the amazing roof garden and outdoor space with spectacular views, 23 feet of double height space, private terrace, gym reserved for tenants and the quality of the new construction. “
The Silicon Valley-based venture capital firm founded by Marc Andreessen and Ben Horowitz, known as a16z, has signed a 10-year lease for 33,560 square feet of office space at 200 Lafayette St. The new excavations will serve as the company’s New York headquarters, replacing a much smaller footprint at 11 Madison Ave.
The company has $ 19.2 billion in assets under management, including a $ 3.1 billion crypto fund that will be managed at 200 Lafayette St.
The seven-story 1893 building recently underwent a $ 36 million renovation. Swiss RE owns floors three through seven, while Brookfield Properties owns the retail space on the first and second floors.
Barbara Winter and Carlee Palmer of JLL represented the property. Adam Henick and Brandon Charnas of current real estate advisers represented a16z.
The rents charged for the offices are $ 95 per square foot.