Dumbo's Vacancy Rate at 2%, Move Towards Vinegar Hill

(Source: WSJ)

An article over the weekend by the Wall Street Journal discussed the dearth of apartments and commercial space in Dumbo. The Observer’s BetaBeat, Brooklyn Paper, and The Real Deal also reported on the limited commercial space in Dumbo last week.

According to the WSJ article, three large development projects have been created on Water Street (between Jay and Bridge Streets) – 192 Water Street, 205 Water Street, and 220 Water Street:

But developers are betting that with little inventory available in the more-developed part of Dumbo, buyers and renters will be willing to pay similarly steep prices to live along the grittier border with Vinegar Hill, a six-block neighborhood along the waterfront.

“The concept that Dumbo is just a two- or three-block area is a misconception,” said Carre Harnett, director of leasing for the developer, GDC Properties, which developed one of the new properties, 220 Water St. “There are a finite number of developable buildings and a few parts of land, so we’re filling out Dumbo.”

…thanks in part to a rezoning a few years ago to allow for residential conversions and new construction, eastern Dumbo has seen a modest influx of apartments. Construction was sluggish through the recession, but several buildings ahave finished or are nearing completion.

At 205 Water St., Toll Brothers is building a 65-unit condo project that tries to emulate the warehouse buildings in the area, including using reclaimed wood from the Coney Island boardwalk as part of the interior decorating.

In addition, at 192 Water St., Alloy Development and Hamlin Ventures have converted a century-old tea warehouse into nine lofts, most of which were priced just under $2.5 million.

While many of the streets still feel desolate, a mix of stores—from a baby and maternity shop Egg by Susan Lazar to clothing boutiques like Blueberi and Trunk—have popped up.

Other development projects in East Dumbo not mentioned in the article are 37 Bridge Street (residential), 231 Front Street (commercial), 109 Gold Street (now a rental), 185 York Street (residential), and 51 Jay Street (commercial, on the market). I’m sure this contributed to the Jehovah’s Witnesses properties in Dumbo being considered for sale.

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