10/04/2011 02:59 pm ET Updated Dec 04, 2011

Brooklyn Agencies Aren't Trying To Rival Madison Avenue

NEW YORK -- As young creative types hop on their bikes and head off to work, they're increasingly arriving in the Brooklyn neighborhoods of Dumbo and Williamsburg, where a panoply of small ad shops, many focused on digital production work, are exporting their wares to the big agencies.

"There's an attitude and an aura and an air about the whole place that's hip and cool and interesting and speaks to them being off the beaten path," said Jed Walentas, whose Two Trees Management Company controls much of the commercial real estate in Dumbo.

That aura led some to muse as to whether Manhattan is losing a little bit of its shine to its long-ignored cousin across the East River. But real estate watchers and agencies themselves caution that Brooklyn, while it has increasing value as a "brand" in and of itself, still has its limitations in the marketplace.

Madison Avenue isn't losing many tenants to Front Street. Talent may be taking the F Train, but for now the big agencies aren't. And some of their newest clients, internet companies like Google and Facebook, are sticking to the inner borough.

In part that decision comes down to a simple matter of size: No matter how attractive Brooklyn's tax incentives and cheaper office space may seem to some of the bigger players in the industry, its commercial buildings can only fit so many people.

"The challenge is there's not that much space," said Chris Havens, the founder of the Creative Real Estate Group and a long-time real estate player in the area. "Dumbo's very tight."

And Downtown Brooklyn, while it may have buildings that can claim skyscraper status, "lacks the sex appeal and hipness that I think these firms are trying to portray," Walentas said.

All the same, for smaller agencies, Dumbo and Williamsburg offer an attractive counterweight to Midtown Manhattan, where the big shops seem permanently ensconced.

"When you're making 35, 40k and you can ride your bike to work in 20 minutes?" asked Patricia Korth-McDonnell, a partner at HUGE in Dumbo, "It makes a difference. There are very few young people these days that can afford to live in Manhattan."

Still, Korth-McDonnell said, the idea that Brooklyn is the new Madison Avenue is "incredibly overblown." The industry is not "in the middle of some massive exodus."

Walentas, the real estate developer, agreed. He hasn't heard of larger agencies seriously considering Brooklyn. They may, more and more, include it on their search list when looking for a new building. But the draw of Manhattan is still too great.

What he has seen is startups that are growing up. Even as the rest of the economy took a beating in the wake of 2008, he said he rarely had trouble filling office space in Dumbo.

"Over the last two years we've had almost no space to market," Walentas said. "And I think the biggest reason for that is this homegrown roster."

What Korth-McDonnell sees, instead of some great reverse migration of the large agencies, is a "new kind of model emerging," where firms like hers, which had been focused on art production and other services that clients never see, move up to offering a fuller range of services.

HUGE has redesigned and is the digital agency of record for Comcast's website. Those are big clients for an agency that only started in 1999.

"If you look at the biggest of the digital shops," she said, "they're starting to become full-service communication shops that come in through the digital door."

"When you're trying small and trying to build a name," she noted, a Brooklyn address can still add a little bit of an asterisk. "It becomes, are these guys for real, are they going to stick around?"

But for firms like hers -- which now has about 400 employees -- Brooklyn can also be "a quirky plus."

As the Brooklyn boomlet grows and matures, ad agencies may also want to keep in mind that the borough isn't the only alternative to giant glass-and-steel skyscrapers. Manhattan still has plenty of nooks and crannies for independents looking to make a statement.

David Droga, the founder of the Clio and Cannes Grand Prix-winning agency Droga5, likes what Brooklyn has to offer -- but his company is headquartered in the East Village. In just a few short years his independent has made a name for itself with innovative campaigns for the likes of Jay-Z and Puma, and he fancies his agency has a certain level of outsider appeal.

"I wear flannel too," he noted, deadpan.

Droga said Manhattan still held an incredible draw for him. It wasn't really proximity to clients and collaborators per se -- since the internet is increasingly collapsing the advantage of being right next door on the Avenue -- but a certain energy Manhattan has that Brooklyn, with its lower-slung buildings, may never be able to match.

Still, he wasn't entirely ruling Brooklyn out -- that was a dishonor he reserved for Madison Avenue.

Would he ever move to Midtown?

"Never, no way in the world," Droga said. "You would suck the soul right out of my face if I did that."