Dumbo Commercial Real Estate Update (Nov 2011)

220 Water Street

We received the below update from Chris Havens, Chief Executive at Creative Real Estate Group, a local commercial real estate business. Essentially, the office vacancy in Dumbo is very limited and there are only a few restaurant spaces left. Residential rental demand is strong and sales still holding strong.

Headline story is office vacancy rate nearing 2%. I believe this is tightest commercial market DUMBO has experienced since the 1940s. Small tenants can’t find space and large users are shut out. Continued local demand, tenant expansions and Manhattan emigrants keep it going.

Retail footage of 309,000 SF is 13% vacant, generally large spaces (above 3000) on Bridge and Fulton Streets. Small spaces are in great demand. Two Trees is likely to lease their 6600 SF space on the # 1 corner – Front & Washington – shortly, dropping that rate to 11% and to 12 the number of spaces available, out of 129 (the latter figure includes York Street from Bridge to Navy and doesn’t include the storefronts on Hudson used as home offices and homes).

Residential hot streak continue. 25 Washington rentals average in the fifties [$50] per foot. Main Street condos routinely make the Brownstoner Biggest sales of the week column. Of the several condo projects east of Jay Street, 192 Water is selling through, 205 Water St is on the market and 37 Bridge is over 50% [sold]. 109 Gold St is – due to location – slow, with some sales. 220 Water rental opening celebration comes next month — A terrific renovation, it should wrap up quickly.

Con Ed announced it will close the electrical generation facility on John Street at some point. Pier One RFP results are announced the 22nd of this month. The Dock street rental and middle school goes into construction in 2012.

Everyone is watching the Watchtower, which is selling nearly $30mm worth of residential and investment product in the Heights. Is the Bossert Hotel next?

We asked Chris about restaurant locations, and he said the only obvious one is at 220 Water Street and the vacancy left after Grimaldi’s moves one building over. According to The L Magazine, “Mark Waxman, the manager of 19 Fulton Street, has a new tenant already lined up for the soon-to-be-former Grimaldi’s space but he’s not saying who it is: “We’ll announce a new tenant that I think people will be very happy with.”

There’s also 67 Jay Street (photo), to which Chris suggested that a beer hall would be great there, but not sure if there are proper licenses for that there.

And speaking of restaurants, we heard from the chef at the 1 Main St restaurant who told us that the renovations and restaurant equipment is being installed and is on schedule to open early next year (which includes the One Girl Cookies Dumbo location).

For info, email Chris at chriswhavens @ gmail.com.