In East Williamsburg, Artist-Studio Leases Create Woes, and Some Winners

by Corinna Kirsch on January 22, 2014 · 3 comments AFC Reports

1027 Grand Street entrance; courtesy Sharecropper NYC.

1027 Grand Street entrance; courtesy Sharecropper NYC.

Rent prices tend to vary by borough, neighborhood, or street. It’s fairly unusual, then, to see a wide range of rental rates within one building. But at the “Dock Studios” building in East Williamsburg, owned by Grand Morgan Realty, there are tenants just over the moon and those who are ready to get the heck out due to rents raised over 50 percent in the last few years. It all just depends on who you’re leasing from; there’s one landlord, but nearly every floor has a separate leasing manager.

You’ll find one entrance to this huge brick building at the intersection of Metropolitan and Morgan (about a ten minute walk from the Graham L and right before you reach Pumps, Bushwick’s only strip club), where hundreds of artists rent studios alongside old-school industrial tenants like King Wing Clothing. It’s a labyrinthine structure, with divided access to floors, and at least three different addresses for the entire structure. A loading dock connects various parts of the building, thus the nickname “Dock Studios.”

Let’s start with those who have it good in the building. They’re principally located at the Metropolitan Avenue entrance, which consists of all-new construction aimed at attracting artists and art-minded tenants. Kelani Nichole, co-founder of Transfer Gallery, took a commercial lease at 1040 Metropolitan Avenue in January 2013, just as the space was being gutted. Previously this floor had been a 15,000 square foot distribution center for a Chinese umbrella company.

“And when we came the whole first part of the building was open,” she told me the other week at a Saturday brunch hosted by Transfer. “It was empty.” At that point the gallery had two months to plan out shows, but she was confident in the building’s management that all would pan out.

“Basically the person [Pali Kashi], an artist who runs this part of the building got a long-term lease on this whole section. Then she paid contractors to fill out all these studios,” Nichole mentioned. Pali Kashi informed me that she obtained a ten-year lease from Grand Morgan Realty, specifically in order to rent out creative spaces at affordable prices, and that every single floor has a different leasing manager.

And it does seem there’s benefits to having artist-run management, specifically when it comes to listening to their concerns. “They built this storage loft for us,” she pointed out overhead. “And she built our wall flush instead of with beams exposed.”

Since Kashi developed this part of the building, rents have stayed steady at $ 2/square foot, though many of the units are subdivided to attract studio-shares, thus keeping the rents low. (However, Nichole told me her rent will be raised next year.) It’s an attractive, clean space, and the studios are fully occupied.

But, as Nichole indicated, that’s only on the newer side of the building. “The entire building is five floors. On the other side, that’s where people are moving out.” She said she didn’t know who owns or leases that part of the building—with bulking warehouses of this size, it’s easy to see why nobody knows what’s going on in their own backyard. However she did tell me to talk to Phillip Stearns who was moving out of his studio within the next few weeks. He was inside the gallery where the brunch was still going strong.

Without much of an introduction, Stearns straight up told me everything that’s wrong with the rental situation for his studio, located on the fourth floor of 1027 Grand Street.

“The lease has gone up seven percent each year since I’ve lived here to $450,” Stearns told me. “For that I would at least want some improvements,” he said. “But we have no leverage to negotiate.” Routine maintenance regularly gets overlooked, mentioning leaks that would never get fixed.

“One time they were running around throwing rat poison everywhere,” he said, noting that tenants were not fairly warned. “People bring their pets here.”

I wasn’t surprised to hear then that there’s a very low retention rate of current residents at 1027 Grand Street. “Each year turnover is 90 percent,” Stearns mentioned. “There’s two types [who leave], those who can’t afford their studio, and those who need to upgrade.”

He seems to have stayed here longer than most. “I’m the last one from the first batch who moved in four years ago, established by Cooper Union grads. And then, a year later they left for graduate school.”

His residential situation appears a bit better. “Don’t tell anyone Eastern Parkway and Franklin’s getting trendy! My rent hasn’t been raised in five years.”

Of course residential rental laws offer protections in ways that simply don’t exist with commercial ones—commercial tenants only have rights if they’re specifically drawn up in their lease—and artist-studio leases tend to get lumped into the commercial category. That means that there is no built-in rent control for commercial spaces.

Before I headed back to my somewhat pleasantly rent-stabilized apartment, I headed upstairs to see AFC’s Whitney Kimball who was working with artist William Powhida in the 1013 Grand Street side of the Dock. I was not surprised to hear that they, too, were about to move out of this studio, which he sublets from another artist Joe Brittain. But more than Stearns’ seven-percent increase, Powhida casually mentioned that the rent’s gone up by over 50 percent in just two years.

“Everyone in the building is pretty shocked,” Brittain told me over email.  “Over the past 2 years its jumped significantly. It started around $1.60 sq ft, jumped to $2 and will be $2.30 a sq ft for the next tenant. This without any improvements to the space and a reduction in trash and elevator services.”

“We were told by the guys who hold the lease for the second and third floors,” he added, “Glenn and Paul [of Handmade Frames, also located at 1013 Grand Street], that it’s a simple case of the building owner [Grant Morgan Realty] squeezing them and then they have to hand on the increases to their tenants.”

I contacted Handmade Frames, but they were unavailable for comment.

Brittain’s not optimistic, and ended his email on a fairly sour note:

But, sadly, these jumps are pretty universal for the neighborhood.  It seems nearly impossible to find anything under $2 a sq ft and spaces are being cut smaller and smaller.  A skim through Stephanie Diamond’s list is incredibly depressing these days.

A few days later I ran into an artist who rents a studio in a space down the street from Dock Studios. Her rent rises every year, no more than eight percent, but she seemed unconcerned about that. “I’m an adult, I can handle it,” she said.

But being able to pay yearly rent increases isn’t about being an adult. It’s about how artists are stuck with  inconsistent commercial leases that can rise exorbitantly, and for no other reason than that it’s legal to do so. However, it’s also legal to keep the rental rates the same; whether or not the lease increases each year is up to the whims of an individual landlord.

  • Pat L

    I don’t mean to question the hardship that rising rents places on artists and galleries, but I do have a question.

    $2/rsf is pretty low. Is this number determined based on annual rent, which is then paid in monthly installments? I ask only because it’s industry standard to list psf rents in relation to annual rent payment, not monthly rent payment. In this case, a $450 monthly rent payment at $2/psf would get you a 2,700 rsf space. If it’s $2/psf p/m, so really $24/psf, that would be for a 225 rsf space.

    I’m asking only to get a clear picture of what’s going on in East Williamsburg. Thanks! and thanks for staying on the real estate beat, AFC!

    • http://www.corinnakirsch.com/ Corinna Kirsch

      $2 per sq. foot is low. The artists we spoke with talked to used it to talk about rents per month, and while I’m not familiar with the standard to list psf rents in relationship to annual rent payment, thanks for that.

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