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Brooklyn.i n nJ U L X VTHE MONTHLYBUSINESS SECTIONOF THE PHOENIXNEWSPAPERPublished by Serif Press, Inc.395 Atlantic AvenueBrooklyn, NY 11217Telephone 718-643-1400D. B. Armstrong> -.v^.vXvXv Editor-in- ChiefMichael A. ArmstrongEditorTracy GarrityBinni IpcarEd GillespieGeneral ManagerGeorge FialaArt DirectorMichael MolanphyThe Phoenix and Its Special Business Sections Were Honored by theNew York Press Association asBest in New YorkState for Coverageof Business andEconomic Newsin 1985The Phoenix and its Brooklyn, Inc Business Section welcome free lance contributions on Brooklyn business subjects. Send material to: Editor,395 Atlantic Avenue, Brooklyn 11217.For return of material and photographs, be sure to include a stamped, self-addressed envelope.Deadlines for the NextBrooklyn, Inc. Business Section:E d ito ria l, O cto b e r 8A d v e rtis in g , O cto b e r 9P u b lic a tio n , O cto b e r 16For Advertising InformationCall (718) 643-1400PDITORIAL Brooklyn,in cThe Best News About Brooklyn Business In DecadesBrooklyn is busy this month with action across the entirespectrum of business and commerce. Every month has itsown highlight, but September, whose high point must certainly be the third annual BrooklynWorks trade show, is a goodtime to remember that all the Brooklyn action isn%u2019t just atthis great event onthe East River. And that%u2019s the best newsthere has been to tell about Brooklyn business in decades.The steelwork is going up on the borough%u2019s first major newhigh-rise office building in a decade on Pierrepoint Street. Architects are busy with plans for a brand-new Hilton Hotel thathas received its City approvals. Two other major downtownprojects, MetroTech and Atlantic Terminal, are steadily advancing toward their final, formal approvals. One cabletelevision company is actually installing wire in Bay Ridgeand another has finally set its house in order to begin installation of cable in eastern Brooklyn. The Governor and theMayor have formally announced a major new firm is going tobuild railway cars in the Brooklyn Navy Yard. ThreeBrooklyn cultural institutions, The Brooklyn Botanic Garden,The Brooklyn Museum and the New York Aquarium, all haveunderway, or soon will announce, major building plans to expand their facilities. And the best news of all is that this isonly a partial description of what%u2019s going on in this busyborough of ours.Another piece of good business news that makes us veryproud is the publication of this, our sixth edition ofBROOKLYN ,INC %u2014 the borough%u2019s new monthly report onbusiness and commerce. Our biggest and best edition yet inevery way, the growth of BROOKLYN,INC ami its strongreception in the marketplace is healthy testimony to the spiritof excitement and the momentum that is rolling in Brooklynthese days. We are proud to be a part of it all and pledge tocontinue to report %u2014 warts and all %u2014 on the news and theviews of the dynamics afoot in this busy borough of ours.POINT OF VIEW ---------------------- M mi ------------------------------------------%u2014 ------------------------------------meReal Estate Brokers M ust Change Styles To Accom m odate N ew MarketsRICHARD MALTZThe industrial real estate market in NewYork City faces a new set of conditionswhich demand a new level of professionalism from the brokers who serve it.We share the nation%u2019s downturn in manufacturing and the uncertainties of the economy,yet, in a region the size of metropolitanNew York, there are always requirementsfor manufacturing, distribution andwarehouse space. The natural growth ofbusiness fuels most expansion-a reallyhealthy market feeds upon its own growth.The role of the real estate professionalhas expanded to meet the more complexconditions of this market. Conducting toursof available space will not do the job anylonger. Today%u2019s broker must prepare tomeet the needs of owners, investors, andtenants with a broad range of informationresources, sophisticated marketing skills,and financial acumen, and have a largestaff able to give professional attention toevery detail.Marketing industrial space has nowbecome a demanding, crucial part of abroker%u2019s role, although it has not yet readied the heights of office or residentialmarketing. It is a critical skill, requiringknowledge of not only facilities, potentialbuyers and users, financing, and government assistance programs, but also moresophisticated intellectual and emotional approaches to customers. To market any property successfully, a real estate firm musthave the ability to develop and carry out astrategic program, target audiences andwoo them with attractive brochures andRichard Maltz is president of theGreiner-Maltz Company of Long IslandCity.strong advertising know-how.Industrial space in Queens and Brooklyncontinues to show a healthy relationship ofsupply to demand, with a vacancy rate ofless than 2.5 percent. The market has beensteady in the past year. Reflecting theprevailing patterns in New York City, 65percent of industrial space absorbed is usedfor warehousing and distribution; 25 percent for manufacturing and 10 percent forhigh technology operations. Smaller units(under 5,000 square feet) are in shortestsupply, leasing for |7.25 to |8.25/sq. ft. andM a rk e tin g in d u s tria l space is ac ritic a l s k ill re q u irin g know ledgeo f n o t o n ly fa c ilitie s , a n dgovernm ent assistance p ro g ra m sb u t also approaches to custom ersselling for $75-10Q/sq. ft. Most propertiesover 10,000 square feet are asking $3.50 to$7.50 to lease and $35 to $90 to buy, and remain available for longer periods of time.When there is a perception that themarket has softened, tenants tend to usethat %u201cinformation%u201d as leverage againsttheir own landlords, and are actually ingood bargaining positions. They are beinglured by Brooklyn, Queens and the Bronx,and to New Jersey, by active, well-financedpublic development groups and incentiveprograms.Within New York City, the Office ofEconomic Development and the PublicDevelopment Corporation have been aggressively encouraging business through agreat variety of programs-educational,financial, and organizational, and by conveying a positive attitude that invites inquiries and promises assistance. Much ofthe improvement in the city%u2019s economy isdue to the perception of change as well asto actual dollars. People now want to makedeals in the city. The biggest stumblingblock to industrial strength in New York City is the tax structure. Income taxes andoccupancy taxes are both real and perceived impediments that often loom larger thanrents and utility costs.The local industrial real estate marketmay suffer less than other parts of thecountry from dreaded tax reforms. Manyproperties are purchased by users foreconomic and business reasons and not astax shelters. These are very selectivebuyers, operating in a buyer%u2019s market. Invertors have become extremelyknowledgeable, and have been buying verycautiously, with Congress threatening tochange taxes and the financial structuresthey engendered. Construction of new industrial buildings is usually done on contract for users who may purchase or leasebuildings for their own occupancy.Industrial condominiums offer security interms of location and installations and thepotential for appreciation, rather than lowerrent. They typically cost $75-10Q/sq. ft., withdebt service of $7-10/sq. ft.. In most cases,the opportunity cost of the investment atprojected tax rates, with lower depreciation, is not offset.Despite the uncertainties generated bytax reform and the budget deficit andreflected in the stock market%u2019s fluctuations,the patterns of activity we observe lead usto expect the industrial real estate marketto remain on an even keel over the next twoquarters, and real estate firms who areable to meet these challenges, to do well.B USINESS TREND Brooklyn.Small Businesses Account For 75 Percent O f A ll N ew Jobs In BrooklynSmall businesses, long the backbone ofthe City%u2019s economy, are providing increasing job opportunities to New Yorkers, according to a report by New York City Comptroller Harrison J. Goldin.These businesses, each with fewer than100 employees, accounted for three out offour new jobs in New York City betweenMarch, 19M and March 1985, the most recent period for which figures are available.More than 3,000 new small businesseswere established during the study period,accounting for 96.4 percent of the totalgrowth in the number of businesses in theCity.New small businesses are bringing newjobs to every borough. The greatest numberof new jobs was in Queens, where 7,998people found jobs in 983 new smallTn D m a L L m COC C io m n -------4__I**%u2022 W IM J U f UM Ukt V iV U tV U3,395 jobs. Manhattan%u2019s 949 new small businesses employed 4,494 additionalworkers. Staten Island recorded 276 newsmall businesses, employing 2,561 people. Inthe Bronx, 134 businesses accounted for3,495 additional jobs.%u201cThe explosion in small business employment growth reverses a trend evident asrecently as 1983,%u201d Goldin says. %u201cIt is asignificant indicator of the City%u2019s fiscalrecovery.%u201dThe smallest of the small businesses,those with fewer than ten employees, havehelped lead the transformation of the CityThe e xp lo sio n in s m a ll businesse m p lo ym e n t reverses a tre n de vid e n t in 1983. I t is a s ig n ific a n tin d ic a to r o f the C ity 's recovery.economy from goods-producing to serviceoriented, Goldin says.A m n w a KucnnOflOflO tzrifVl fanrne ik o n in nworkers, business service firms showed thelargest rise (862). Included in this categoryare advertising, credit reporting and collection, mailing, reproduction andstenographic services, employment agencies and computer data processing firms,according to Comptroller.Automotive repair, automotive servicesand garage services accounted for 152 smallfirms. Health services and household services each added 144 establishments, andother personal services such as beautysalons showed a gain of 143. There werealso 143 new motion picture businesses and99 other new amusement industry firmsformed. Social service organizations accounted for 96 of the new businesses.New transportation businesses with fewerthan ten employees numbered 64 and included forwarding ami packing sevices andpassenger and freight transit. The communications industry, including phonestores, accounted for 13 new smallbusinesses.Wholesalers handling paper goods, pharm o A a n lirto lo onH fTm oortoa Q ionniinlarl fn r 991new small businesses, and several hundredretail stores, including those dealing withfood (148), furniture (81), apparel and accessories (25), were established.Pag# 2, The Ptoenlx/Brooklyn.lnc Section TWo, September 18,1986