Manufacturing is by no means what it used to be in New York City, and hasn’t been since at least the end of World War II. Today, the industry that was once the lifeblood of the Big Apple, based primarily in Sunset Park, makes up 2 percent of all New York City jobs. But the traditional steel molders and riveters are giving way for specialty manufacturers working in science, fashion and food production—making that number a lot higher.
They’ve been in need of big, open spaces and have been on the search for lower rents. Liberty View, once a naval supply depot, has dedicated 85 percent of its commercial space to manufacturing, according to Mr. King, who represents the landlord in the mammoth building’s retail section.
Manufacturers of different shapes and sizes are drinking Liberty View’s Kool-Aid. Koppers Specialty Chocolate announced earlier this year it was leaving its longtime Greenwich Village home for a 50,000-square-foot Liberty View space. The New York City Economic Development Corporation has a full-floor incubator for emerging fashion firms. Companies specializing in the trade can collaborate on design, production and marketing in the fashion industry.
Retail tenants such as Bed Bath & Beyond and buybuy BABY—both due to open at Liberty View in January—will pay rents that essentially will subsidize the lower rents on above floors being paid by these manufacturers, Mr. King said. Giving a whole new definition to vertical integration, the next step is to have these retailers sell the products designed, manufactured and packaged upstairs.
“That’s still early on the process, but I think you’ll see some of that for sure,” Mr. King said.
Plus there are the tax incentives, which offer a $3,000 credit per worker relocated over a 12-year period for companies that move to Liberty View. Not to mention a slew of other tax breaks that have brought down the rent to jaw-dropping low levels for tenants at the 95-year-old building.
Rents in the area are already some of the lowest along the waterfront before you even factor in tax breaks. A June JLL report on the Brooklyn waterfront broke down the strip into six submarkets. The South Brooklyn Waterfront—Sunset Park being the bulk of that submarket—has an average asking rent of $ 23.20 per square foot, with 11.4 million square feet of inventory. The only market with a larger inventory was Downtown Brooklyn with close to 12 million square feet and an average asking rent of $45.96 per square foot. Just northwest of that, the average asking rent in Dumbo is $62.42.
‘Fourth Avenue poses its own problems in that it’s a wide boulevard, although it does have subway access. It’s going to take a lot to see that transition.’
—Geoff Bailey, SCG Retail
Rents have been especially low at incubator-heavy areas, particularly the 3.1-million-square-foot Brooklyn Army Terminal, which is owned by the City of New York. Two miles south of Industry City, the complex has literally become a place where science meets art. There’s the BioBAT incubator with 500,000 square feet for commercial biotech companies, according to the EDC, which manages the Brooklyn Army Terminal. There’s even something for those who work in the abstract: the 50,000 square foot Charisma Artist Studios, which offers low rents and open spaces for up to 95 artists, according to the EDC. High-end chocolatier Jacques Torres is one of the Army Terminal’s more established tenants…
Interest in 4312 Second Avenue is high but filling the space might become problematic, according to its brokers. The yellow building with red trim has 100,000 square feet on the ground floor—not to mention 85,000 square feet in the basement—which Pinnacle Realty of New York has been marketing for a single user, ideally in the technology or media realms. But it’s been tough to find one company that’s looking for something that large, said Steve Nadel, a member of the team showing the building.
“We have found that the market is really in the mid-size to small-size range,” he said, adding that for “somebody [who] needs a large floor plate, this is unique.”