BROOKLYN, NY-The Brooklyn office market may be beginning a transformation that will ultimately raise its profile in what would be the nation’s fourth-largest city, if it were classified as such. So says a Q2 Office Research Report released by Marcus & Millichap Real Estate Investment Services.

Vacancy continues to linger around 10% and would likely be lower except that a few large contiguous blocks of class A space became vacant over the past 12 months. “Smaller properties with steady income streams generated from multiple uses will invariably attract buyer interest,” states J.D. Parker, regional manager of Marcus & Millichap’s Brooklyn office. “Additionally, the borough’s current residential boom should continue to encourage the purchase of buildings and sites where residential components can be added.”

According to the report, in the borough of Brooklyn, 5,700 new jobs are expected to be added by year’s end. Office-using employment is expected to expand by 1,600 positions by year’s end. Also approximately 150,000 sf of office space is under construction and expected to be delivered this year, compared with 165,000 sf in 2006.

The report states that the reasonably robust local and regional economy will sustain office demand, resulting in a year-end vacancy rate of 10.3%, the same rate as year-end 2006. The Brooklyn office market remains reasonably tight and as a result, owners will be able to implement a 6% increase in asking rents this year to $26.95 per sf. The median sales price of $339 per sf recorded over the past year is a 27% increase from the preceding 12-month span.

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