ULI New York Blog

Real Estate Experts Discuss the Evolving Nature of Industrial Real Estate in NYC

New York City can and should do more to attract and nurture the small, design-focused firms reinventing domestic manufacturing, a panel of real estate specialists and business leaders said June 12 in New York at ULI’s Urban Industrial Real Estate 2.0 program.

Firms working at the nexus of industrial design and small-scale manufacturing need far less production space than the industrial giants that dominated U.S. industry for a century, panelists said. But many of today’s entrepreneurs, such as those in 3-D printing, industrial design and digital manufacturing, struggle with fewer options for credit — and, in New York, face outdated zoning laws.

Domestic manufacturers today are a different breed than their predecessors, often working with low overhead and looking to sell small batches of product directly to consumers, said David Belt, founder of Macro Sea/DBI. “We live in this closer, Kickstarter world where people want to get things (directly) to market,” he said.

They are likely to be smaller firms who start “making things” only after “creating ideas [and] developing those ideas” first, said Steve Hindy, co-founder and president of Brooklyn Brewery.

Jeff Rosenblum, co-managing member at Acumen Capital Partners, said that’s exactly the type of work happening in remodeled industrial space, such as his company’s redone pharmaceutical building in Williamsburg, Brooklyn or at the site of Wednesday’s discussion, the Brooklyn Navy Yard. “It’s just a changing environment, what’s happening in the world of manufacturing,” and land-use policy is often slow to adapt in matching those trends, he said.

Panelists said New York City stands to win by updating its zoning code to accommodate the nimble players in today’s industrial and manufacturing sectors. They roundly cited economic development benefits as one reason, and architect Deborah Berke said creative manufacturers and designers are also well-suited to lease space in — and, in the process, help preserve — the older buildings that represent much of New York City’s historic character.

The group suggested an update of the city’s zoning code is overdue, as many otherwise-appropriate sites cannot host the diverse work many firms in digital design and manufacturing want to pursue. Miquela Craytor, a vice president at the New York City Economic Development Corporation, cited an investor who had planned a membership-based technology fabrication shop in Brooklyn but recently had to redraft its plans after learning commercial zoning laws wouldn’t allow the work at its preferred site.

Craytor said too many of the city’s building and zoning laws are “based on the 1950s manufacturing era” and its needs. Today’s industry focuses more on design and the creative processes behind it, with manufacturing coming straight from the same designers’ respective shipping docks.

Belt and other panelists suggested the city’s business community should do more to raise awareness of the positive spillover effects new industry has on the local economy. He said digital manufacturing and new industrial design attracts young, bright talent that can contribute to a new “a gray collar” class that dwells “somewhere between the blue and white” collar worlds.

Andrew Kimball, president and CEO of the Brooklyn Navy Yard Development Corporation, moderated Wednesday’s panel, which was organized by ULI New York’s Young Leaders Group. The event was held at the Navy Yard, which the Pratt Institute’s Center for Community Development recognized last year as a model of creative economic development for other US cities.

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