REBNY reports that 10 of the 15 retail corridors in Brooklyn saw asking rent increases this summer.

NEW YORK CITY—New office, hotel and residential projects throughout the borough have led to strong retail demand in Brooklyn and increased asking rents in most key retail corridors there.

The Real Estate Board of New York has released a report that indicated available ground floor retail spaces in Kings County rose in 10 of the 15 retail corridors it analyzed this summer.

REBNY's Brooklyn Retail Report Advisory Group states the borough's retail leasing market is benefitting from the opening of new hotel and office projects that have increased shopper foot traffic in Brooklyn neighborhoods. Those projects, combined with the expansion of new residential development throughout the borough, have fostered increased retailer interest in rapidly changing corridors within neighborhoods, particularly Bushwick and Crown Heights.

“New developments are drawing more attention, particularly from retailers that are looking to develop a presence in Brooklyn as an extension of their Manhattan mainstays,” says REBNY president John Banks. “In spite of shifting national retail market conditions, Brooklyn continues to present attractive storefront opportunities in growing, more densely populated neighborhoods.”

The report highlights the strong retail corridors in Park Slope and Prospect Heights. For example, Fifth Avenue in Park Slope, between Union Street and Ninth Street, enjoyed a 19% increase in the average asking rent for ground floor retail space in the summer of 2017 compared to a year earlier. The increase to $95-per-square-foot was a result of very low inventory in the corridor compared to last year. The remaining availabilities were grouped in the more expensive, northern segment of the corridor, which had an upward effect on the overall average asking rent, the report states.

The new asking rent average is an all-time high and the first significant rise in average asking rents per-square-foot for the Fifth Avenue corridor since the inception of the REBNY Brooklyn Retail Report after summer 2015.

Seventh Avenue in Park Slope, between Union Street and Ninth Street posted an average asking rent of $124-per-square-foot, a 35% increase from the summer of 2016; just shy of the corridor's all-time high average asking rent of $129-per-square-foot recorded in winter 2017. The sharp rise in retail asking rent along Seventh Avenue was also due to low available inventory.

In Prospect Heights, the average asking rent for Flatbush Avenue, between Fifth Avenue and Grand Army Plaza, increased 7% from the summer of 2016 to $109-per-square-foot for ground floor retail space in the summer of 2017. The retail corridor's strength is due to Barclays Center, along with an influx of new residents from recently completed new residential developments that has prompted shrinking retail availability, the REBNY report states. The remaining available storefronts in the corridor have asking rents in the range of $78 to $125-per-square-foot.

In Brooklyn Heights on Montague Street, between Hicks Street and Cadman Plaza, the average asking rent for available ground floor retail space declined for the first time since the inaugural REBNY Brooklyn Retail Report for the summer of 2015. The corridor's average asking rent declined 21% from the summer of 2016 to $151-per-square-foot this year due to the leasing of several, more expensive spaces on the corridor, REBNY's report notes.

Another retail corridor to suffer a drop in retail asking rent was in Williamsburg, specifically the Bedford Avenue corridor between Grand Avenue and North 12th Street. The area saw a 13% year-over-year decline in average asking rent of ground floor retail space to $325-per-square-foot. The fall in asking rent in the Bedford Avenue market was the result “of the bifurcation of the corridor split between the lower priced north end and the highly sought-after blocks between North 4th Street and North 8th Street,” REBNY reports.

Above North 8th Street, the average asking rent was $163-per-square-foot, while the average asking rent of ground floor retail space between North 4th Street and North 8th Street was $393-per-square-foot. While the average asking rent for the entire corridor skewed lower this period—due to a larger amount of available listings located on the north end of the corridor—the average asking rents for the two Bedford Avenue retail corridors remained stable.

Earlier this week, REBNY staged a roundtable event that covered the complex retail market at the moment and the sometimes divergent forces that exist between bricks and mortar and Internet sales and their impact on the retail real estate sector.

Instant Insights /

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