Historic 25 Elm Place welcomes a tenant from 189 Montague St.
Eye On Real Estate
Welcome to Elm Place.
A ritzy department store building from the tail end of the 19th Century has become a refuge for a tenant relocating from 189 Montague St., a Brooklyn Heights office building that’s being torn down to make way for an apartment tower.
NYPD Counseling Services/NYPD Youth Services signed a lease for a 17,400-square-foot office at 25 Elm Place in Downtown Brooklyn — a Renaissance Revival property constructed in 1899 and 1900 for high-end retailer Frederick Loeser & Co. The asking rent was $32 per square foot.
The buildout of the new tenant’s space, which is on the fifth floor, is underway. The expected move-in date is spring 2016, Robert F. Hebron IV, a partner at Ingram & Hebron Realty, told Eye on Real Estate.
“J. W. Mays was delighted to place this tenant in one of their buildings,” he said.
Ingram & Hebron is the exclusive leasing brokerage for 25 Elm Place. The property has belonged to J. W. Mays or a predecessor corporation for several decades, city Finance Department records indicate.
The signing of this lease brought the 160,000-square-foot building to 100 percent occupancy, Hebron said.
Two other Downtown Brooklyn office properties that belong to J. W. Mays — 9 Bond St. and 10 Hanover Place — are also 100 percent occupied. Ingram & Hebron is the exclusive leasing brokerage for them as well.
John Morrill and Michele Freeman of brokerage CBRE repped NYPD Counseling Services/NYPD Youth Services in the transaction.
The tenant signed a 20-year lease, which is a long term for office space. Usually landlords don’t want to tie up spaces in their buildings for that long, in case they decide to sell them.
“It’s the only 20-year lease I’ve ever done,” Hebron said. “It’s what the NYPD wanted for the sake of continuity.”
Hebron has held an active real estate license since 1987 and has leased hundreds of thousands of square feet of commercial and retail space.
During the construction of its new office at 25 Elm Place, the tenant is in temporary space at another Downtown Brooklyn building.
According to Brownstoner.com historical expert Suzanne Spellen, who writes under the pen name Montrose Morris, Frederick Loeser & Co. was Brooklyn’s second largest department store in the early years of the 20th Century, and was a very upscale establishment.
Prominent architect Francis H. Kimball was hired to design 25 Elm Place, which was a store annex.
Later on, the grand retailer became more middle-class and shortened its name to Loeser’s, Spellen wrote. The store closed in 1952.
Tough market conditions for office tenants
The CBRE brokers started searching for a new office for NYPD Counseling Services/NYPD Youth Services in 2013. Market conditions in Brooklyn Heights made it a difficult assignment.
“There’s no inventory,” Hebron said. “That’s the big challenge.”
Many Brooklyn Heights office buildings have no available office space whatsoever — for instance 188 Montague St., where Ingram & Hebron now has an office. Like NYPD Counseling Services/NYPD Youth Services, the real estate brokerage had also been a tenant at 189 Montague St.
At 16 Court St. — which by the way is Brooklyn’s tallest office building — the occupancy rate is 96 percent.
Asking rents for Brooklyn Heights office space range from $38 to $39 per square foot to around $50 per square foot.
The Downtown Brooklyn office market, which has asking rents in the low-to-mid-$30s per square foot, is tight as well.
According to a report released in August by the Downtown Brooklyn Partnership, the office vacancy rate in Downtown Brooklyn is 3.4 percent — while in midtown Manhattan, it’s 8.9 percent.
Exodus from 189 Montague St.
Hebron’s firm helped several of 189 Montague St.’s tenants relocate.
Their leases had a provision requiring them to move if there was a change in the property’s use.
Ingram & Hebron served as tenant broker for several small lawyers’ offices and one dentist’s office, finding space for them at 16 Court St., 44 Court St. and 186 Joralemon St.
The firm is the exclusive leasing brokerage for 16 Court.
Ingram & Hebron was also the tenant rep for retailer Cohen Optical, which moved to 151 Montague St.
As the Brooklyn Eagle previously reported, landlord Treeline Cos. leased 189 Montague to Jonathan Rose Cos. for a 32-year term that can be extended to 40 years. The developer is combining 189 Montague with adjacent property 146 Pierrepont St. into a site where it’s building a 19-story, 86-unit rental-apartment building.
The development project was the focus of unusual attention this past August when a drone controlled by a man on the roof of 189 Montague buzzed past the windows of neighboring buildings and above pedestrians on busy Montague Street.
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