- Brooklyn office leasing activity more than doubled quarter-over-quarter in Q2 to 379,000 square feet, with nonprofit organizations accounting for 69 percent of all signings.
- Brooklyn Defender Services signed the borough’s largest lease at 209,208 square feet at 181 Livingston Street, while availability fell 320 basis points year-over-year to 17.2 percent.
- Asking rents dropped 12 percent year-over-year to $47.61 per square foot, a fourth straight quarterly decline even as leasing activity accelerated across the borough.
A wave of nonprofit office leases pushed Brooklyn’s office market to its tightest availability in nearly a decade last quarter, according to a new CBRE report. Leasing activity more than doubled from the first quarter to 379,000 square feet in the second quarter, with signings running 61% above the borough’s five-year average. The surge came almost entirely from mission-driven tenants clustering around Downtown Brooklyn’s civic corridor.
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A Borough Built on Nonprofits
Brooklyn’s office market has long played second fiddle to Manhattan’s. But nonprofits are emerging as one of its steadiest sources of demand.
Nonprofits accounted for 69% of all Brooklyn office leasing in the second quarter. CBRE flagged that concentration as unusually high, even for Brooklyn.
Many organizations priced out of Manhattan’s core submarkets are moving to Downtown Brooklyn. The area offers easy access to courts, city agencies and the communities they serve. It also gives staff a shorter, cheaper commute than Lower Manhattan.
Downtown Brooklyn has become a hub for legal-aid groups, social service providers and advocacy organizations. Some nonprofits are also leaving Manhattan towers as leases expire and operating costs rise.
The Details
Nonprofit legal services provider Brooklyn Defender Services signed the quarter’s largest lease. It took 209,208 square feet at 181 Livingston Street.
The group also signed a 15,170-square-foot lease next door at 177 Livingston Street. Rising Ground, a nonprofit focused on child welfare and family services, took 20,500 square feet at 111 Livingston Street.
Those three deals made up a large share of the quarter’s leasing volume. The activity was therefore concentrated among a few large tenants rather than spread across the market.
The withdrawal of a large, outdated block at 250 Livingston Street also helped push availability lower. Availability fell 320 basis points year-over-year to 17.2%. That was the tightest reading in nearly 10 years.
Brooklyn also recorded 673,000 square feet of positive absorption.
Zooming Out
Brooklyn’s momentum remains modest compared with Manhattan. Manhattan alone recorded 3.87 million square feet of leasing in July, according to Colliers.
Brooklyn landlords also aren’t benefiting from higher rents yet. Asking rents fell 12% year-over-year to $47.61 per square foot. That marked the fourth consecutive quarterly decline.
“The lease of a large, high-quality block of space by Brooklyn Defender Services at 181 Livingston Street drove much of the quarterly decline,” CBRE said. The withdrawal of a below-market block at 250 Livingston Street offset some of the decline.
The quarter’s results came mostly from a few large transactions. That is different from a broad recovery in tenant demand.
The same disconnect is appearing elsewhere in the city. One NYC office landlord is facing much deeper financial pressure despite stronger citywide leasing.
Why It Matters
Brooklyn’s falling rents and tighter availability point to a fragile office recovery. The market is benefiting more from removing obsolete space than from broad demand growth.
For landlords, leasing volume alone may not reverse years of rent declines. For nonprofits and other price-sensitive tenants, however, large spaces remain available at meaningful discounts to pre-pandemic rents.
That opportunity could narrow if institutional and financial tenants begin competing for the same blocks. Brooklyn’s market still depends heavily on a few large transactions rather than steady base demand.
The next quarter could look very different if comparable leases fail to materialize.
What’s Next
CBRE will watch whether nonprofit demand spreads to other tenant sectors. It will also track large blocks coming back to market near Downtown Brooklyn’s transit hubs.
If rents stabilize while availability continues to fall, landlords could regain leverage as early as 2027. Well-located, amenitized buildings along Livingston Street may benefit first.
The durability of nonprofit demand will depend partly on how much large, contiguous space remains available after this quarter’s deals are absorbed.
