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Winter 2020 Brooklyn Retail Report
March 17, 2020
In winter 2020, average asking rents for ground floor retail spaces decreased in 9 of the 12 Brooklyn corridors analyzed by the Real Estate Board of New York (REBNY) when compared to the winter of 2019. Overall, major Brooklyn retail corridors continue to observe stabilizing rents from peak levels as owners are better positioning their spaces to meet tenant expectations. Historical trends reflect the changing identities of certain retail corridors in areas experiencing increased density from residential, commercial, and mixed-use developments.
Three of the five Williamsburg retail corridors surveyed witnessed declines in asking rents during the winter of 2020. Along Bedford Avenue, between Grand and North 8th Street, average asking rents declined to $276 per square foot (psf), a 14% decline year-over-year. The decline in asking rents is attributed to a substantial increase in the number of available listings, as newer availability is set at asking rents below historical averages given the level of availability and the continued uncertainty about the future plans for the L train. Average asking rents along Grand Street, between Marcy Avenue and Kent Avenue, fell to $87 psf. Similarly to Bedford Avenue South, there is a significant increase in the amount of listings in which most of the new availability is located past Bedford Avenue where rents tend to be lower. On North 4th Street, between Driggs Avenue and Kent Avenue, average asking rents fell 31% year-over-year to $135 psf. North 4th street consistently has minimal availability.
Average asking rents on Franklin Street, between Meserole Street and Commercial Street, and Manhattan Avenue, between Driggs Avenue and Kent Avenue remained flat at $69 psf and $70 psf, respectively, when compared to the winter of 2019. Greenpoint continues to observe an abundance of new development from the Greenpoint Landing mega-development to renovations of older buildings with under 10 units. Retailers are capitalizing to shifting demographics and rehabbed storefronts by offering new restaurant concepts and creative dry/service uses. Deal making is occurring at a steadier pace with average taking rents 20% below the ask.
In Park Slope, average asking rents along 7th Avenue, between Union Street and 9th Street, fell to $99 psf, a 15% decline year-over-year. Most of the current availability is comprised of several large spaces with the capability of splitting into smaller spaces. These owners are keeping asking rents high leading to longer time on the market. Even though asking rents on 7th Avenue remain high, deal making has occurred by negotiating lower rents. On 5th Avenue, between Union Street and 9th Street, average asking rents rose to $99 psf, a 15% increase year-over-year. 5th Avenue is in a transitional state with the continued trend of availability being recent restaurant closures due to spikes in property taxes and rent.
In Downtown Brooklyn’s Fulton Street area, between Boerum Place and Flatbush Avenue, average asking rents rose to $296 psf, a 13% increase year-over-year. Activity along the corridor is stable with recent short-term deals causing a decrease in the amount of available spaces. Fulton Street remains a strong corridor with low vacancy with a boosted demand for retail space. Tishman Speyer’s new Wheeler Development, new home to the Whittle School, is increasing foot traffic and activity. On Court Street, between Atlantic Avenue and Pierrepont Street, average asking rents fell to $157 psf, a 5% decline year-over-year.
Average asking rents in Dumbo, along Washington Street, Front Street, Jay Street, Washington Street, and Main Street, fell to $60 psf, a 40% decline year-over-year. Dumbo is a seasonal market characterized by low availability, causing asking rents to be volatile dependent on seasonality. Interest for retail space will continue to rise as new mixed-use developments will cause neighborhood density to increase. Current tenants consist of food and service uses, particularly in fitness and wellness.
In Cobble Hill, average asking rents on Smith Street, between Atlantic Avenue and Carroll Street, rose to $95 psf, a 34% year-over-year increase. Likewise, on Court Street, between Atlantic Avenue and Carroll Street, average asking rents rose to $120 psf, a 22% year-over-year increase. Heavy construction and rehabilitation of spaces is occurring on Court Street and Smith Street. Current availability is a mixture between less desirable brownstone retail spaces and newly rehabbed spaces hitting the market. Recent leasing activity has occurred from a mix of national and local tenants including Malin & Goetz, UPPAbaby, Bond Veterinary, and White Noise Coffee Company.
In Prospect Heights’ Flatbush Avenue, between 5th Avenue and Grand Army Plaza, average asking rents declined 4% year-over-year to $120 psf. Flatbush Avenue is an attractive corridor for prospective retail tenants given its proximity to the Barclays Center, Atlantic Terminal, and the LIRR. With an influx of new tech start-ups and creative companies, the commercial appeal of the corridor continues to rapidly increase.