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rooklyn office landlords are still grappling with a glut of new buildings constructed over the past two decades. Leasing activity plummeted by nearly 50% in December compared to the previous quarter, totaling just 140,000 square feet, according to a Colliers report. The borough's full-year leasing volume dropped 31% year-over-year, reaching 930,000 square feet.

    "The smaller pool of tenants available to Brooklyn's office market is a major factor behind this decline," said Franklin Wallach, a Colliers expert. "The ongoing flight-to-quality trend in Manhattan has spilled over into Brooklyn, but the borough's oversupply of new Class A construction remains a significant challenge."

    Approximately 18% of Brooklyn's 47 million square feet of office space was built within the last two decades, with an availability rate of 37.5%. This compares to an overall availability rate of 21%. The average asking rent for post-2000 buildings has decreased for three consecutive quarters, now standing at $63 per square foot.

    The market remains dominated by small and mid-sized tenants from sectors like healthcare, education, non-profit, and government. Notable lease deals include Rising Ground's 27,000-square-foot agreement at 111 Livingston Street and Staging company Staged to Sell Home's 24,000-square-foot lease in Industry City. However, most leases are for less than 1,000 square feet.

    "It's all about small spaces being leased," said longtime Brooklyn broker Christopher Havens of TerraCRG. "Manhattan is becoming increasingly affordable, making it a more attractive option for businesses."