Could Brooklyn be a global city in its own right?
The largest of the five boroughs in New York, Brooklyn is home to 2.6 million people and has become something of a poster child for gentrification. The term 'Brooklynization' is becoming a well-known term for the trend (see also: 'hipsterization').
Zillow, the online real estate database company, estimated in 2013 that around one in four people in the borough worked in the arts and, while there's some speculation as to whether creatives are being priced out of the market, the fact is that demand for real estate continues to grow and it plays an important part in New York's ability to attract the best talent.
What makes the borough so attractive?
A thriving local economy
The borough boasts a diverse service-based economy including healthcare, retail and leisure employment, but the highest value growth is coming from the Technology, Advertising, Media and Information (or 'TAMI') sectors. According to real estate brokers Knight Frank, New York City TAMI employment has increased by 29% since 2009. This surpasses the employment during the previous tech boom of the early 2000s by 8%.
A creative population
Its high volume of creatives is something that appears to be coveted by others. Detroit, seeking to reinvent itself after the long decline of its dominant motor industry, has been actively recruiting 'creative types' with promises of warehouse spaces, community-based projects, an experimental art scene and innovative design.
A growing population
The borough is growing faster than the rest of New York City and some locals are, understandably, unhappy with rising rents and building heights. The area has seen a long history of change and trends are generally in line with US immigration patterns. Some see this as a longer-term shift where smaller towns in the US are losing population to larger metropolitan areas.
Source: William H. Frey, The Brookings Institution, 2014
Innovative use of space
Densely populated areas of course mean space is at a premium, and local business are always looking for new ways to make the most of it. In Brooklyn’s case part of its appeal is the repurposing of industrial spaces such as the Brooklyn Navy Yards for today’s growth industries. Another such example is where entrepreneurs are using 'vertical farming' to grow food in shipping containers in an attempt to meet the demands for locally-sourced produce.
Multi-family residential developers are are betting big on the borough’s prospects, especially in downtown Brooklyn and Williamsburg. CoStar, the property research firm, estimates 14,000 multi-family apartments will be built between 2016 and 2017, representing around a quarter of new residential builds in the New York metro area.
Office developers are also under construction or planning over 16 million square feet of office space over the coming years, according to the New York Times.
Brooklyn ticks a number of boxes from a real estate investor's perspective – a diverse local economy, thriving cultural scene and growing creative workforce.
The demand generated by its latest transformation must however be considered in the context of new and existing real estate supply. We considered this balance further in our research into self-storage in the borough.
While Brooklyn’s scale and success is impressive, it doesn't yet warrant a position our Global Cities Index by itself. It does however further strengthen New York City’s global status.
- Should you aspire to sport a beard and a fixie bike, we suggest you check out Hipster Air to find out more about travelling to the hippest neighbourhoods globally
- Brooklyn looks set to surpass Chicago to become the third largest city in the US, according to Gothamist
- City Point is Brooklyn's newest and largest mixed use retail offering, as covered here in Real Estate Weekly
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