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Summer 2019 Brooklyn Retail Report
October 24, 2019
In summer 2019, average asking rents for ground floor retail space decreased in 12 of the 17 Brooklyn corridors analyzed by the Real Estate Board of New York (REBNY), when compared to the summer of 2018. Overall, the Brooklyn retail environment is evolving with declining asking rents in more mature neighborhoods as landlords seek to remain competitive by reassessing the value of their retail spaces among shifting demographics. Progressing neighborhoods are experiencing favorable market trends due to increased foot traffic from new residential, commercial, and mixed-use developments.
Four of the five Williamsburg retail corridors surveyed witnessed declines in asking rents during the summer of 2019. Along Bedford Avenue, between Grand Street and North 8th Street, average asking rents fell to $153 per square foot (psf), a 9% decline year-over-year. These decreases in asking rents led to an uptick in leasing activity. Average asking rents along North 6th Street, between Driggs Avenue and Kent Avenue, fell to $246 psf, a 2% decline year-over-year. North 6th Street is experiencing healthier tenant demand as several rehabbed retail spaces are now available for leasing. New high-profile tenants like Warby Parker, Buck Mason, and Marine Layer demonstrate the corridor’s strong appeal.
Average asking rents on Franklin Street, between Meserole Street and Commercial Street, remained flat at $74 psf when compared to the summer of 2018. On Manhattan Avenue, between Driggs Street and Ash Street average asking rents fell to $67 psf, a 4% decline year-over-year. The retail environment in Greenpoint is in a state of flux as the neighborhood’s demographics are shifting with new residential developments under construction and increased foot traffic from the Greenpoint Landing ferry. Retail uses are neighborhood centric ranging from mom-and-pop, service, and amenity uses. Older owners are exercising patience in an effort to sign up-and-coming tenants.
In Cobble Hill, average asking rents on Court Street, between Atlantic Avenue and Carroll Street, rose to $96 psf, a 3% increase year-over-year. Along Smith Street, between Atlantic Avenue and Carroll Street, average asking rents fell to $83 psf, a 4% decline year-over-year. For both corridors, availabilities of higher-value and revamped retail spaces have led to increased tenacity from perspective tenants, as demonstrated by the recent leases by Crunch, My Gym, and Moschino.
“Cobble Hill is witnessing increased retail activity and demand for retail spaces, as older leases are now expiring, and more desirable spaces are becoming available for perspective tenants. As rents are increasing, many of these leases are not renewing. A significant amount of construction is undergoing to rehab older single-story retail spaces and the creation of new multi-story availabilities.” – Mitzi Flexer, Cushman & Wakefield
In Park Slope, average asking rents along 7th Avenue, between Union Street and 9th Street, fell to $86 psf, a 23% decline year-over-year. Asking rents along 7th Avenue have adjusted downwards to more sustainable levels, in part due to competition from expanded corridors that offer greater visibility. On 5th Avenue, between Union Street and 9th Street, average asking rents rose to $104 psf, a 10% increase year-over-year. 5th Avenue remains a highly attractive corridor with rents expected to increase, as several older buildings are being rehabbed. Current availabilities mainly consist of recent restaurant closures.
“Despite the summer months usually being slower, retail activity along 7th Avenue is picking up with landlords becoming more flexible by adjusting rents and leasing out spaces that have been on the market for over a year. 7th Avenue, traditionally the home to Mom & Pops is beginning to see an influx of credit tenants signing leases.” – Jeffery Kessler, LEVITAN
On Montague Street, between Hicks Street and Cadman Plaza, average asking rents fell to $86 psf, a 22% decline year-over-year. Compared to other corridors, low availabilities are common on Montague Street as prime retail spaces are already leased out and current availabilities are considered less desirable.
“Current Montague Street availabilities are mainly converted brownstones featuring “step-up” or “step-down” retail spaces more suited for local tenants with lower asking rents with prime retail occupied by national tenants.” – Curtis Woodside, Compass
In Downtown Brooklyn’s Fulton Street, between Boerum Place and Flatbush Ave, average asking rents rose to $237 psf, a 1% increase year-over-year. The corridor is experiencing increased foot traffic from new high-profile developments such as Brooklyn Point, The Brooklyn Grove, 76 and 211 Schermerhorn Street, and 11 Hoyt. CityPoint Brooklyn has transformed the retail environment along Fulton Street, as the number of outlet/ discount clothing stores is declining. Perspective tenants have more incentives to execute leases as both large and small landlords alike are offering more flexible concessions. REBNY’s previous Brooklyn Retail report added Court Street, between Atlantic Avenue and Pierrepont Street, as a new corridor. For summer 2019, average asking rents along this corridor fell to $160 psf, a 4% decline from winter 2019.
Average asking rents in Dumbo, along Washington Street, Front Street, Jay Street, Water Street, and Main Street, fell to $103 psf, a 7% decline year-over-year, as prime spaces have been leased. Demand for Dumbo retail space remains high as new mixed-use developments at 85 Jay Street and 168 Plymouth Street will significantly increase neighborhood foot traffic.