Residential development drives ground floor retail rents in borough amidst cloudy national retail climate
Average asking rents for available ground floor retail spaces increased in seven of the 15 Brooklyn retail corridors analyzed in the Real Estate Board of New York’s (REBNY) Winter 2017 Brooklyn Retail Report when compared to winter 2016. Despite recent setbacks across the national retail landscape, Brooklyn retail average asking rents remain robust with healthy demand for available spaces.
The REBNY Brooklyn Retail Report Advisory Group observed that the strongest average asking rent growth has continued in areas with new residential development and potential for increased residential density. The group also found that ground floor retail availabilities in some corridors were clustered in more desirable locations with higher asking rents, which contributed to the upward tug on average asking rents.
Meanwhile, average asking rents for available ground floor retail spaces remained flat in three corridors and declined in the remaining five. The declines were attributed in part to the concentration of available retail spaces in the lower-priced periphery of these corridors.
“The retail real estate market in Brooklyn continues to demonstrate strength driven by rising residential development and new retail supply coming to market,” said John Banks, REBNY President. “While national brick-and-mortar retail has taken a hit this year due to shifting shopping trends, Brooklyn has retained retailer interest for transit-oriented locations with growing foot traffic.”
Highlights of the Winter 2017 Brooklyn Retail Report:
- Out of all the North Brooklyn corridors, Greenpoint’s Franklin Street, between Meserole Avenue and Commercial Street, experienced the largest year-over-year increase in the average asking rent for available ground floor retail space surging 41 percent to $89 per square foot. This corridor has undergone rapid change with new residential projects and retail spaces coming to market.
- In Park Slope on Seventh Avenue, between Union Street and Ninth Street, the average asking rent for ground floor retail space jumped 35 percent to $129 per square foot compared to the winter of 2016. According to REBNY’s Brooklyn Retail Report Advisory Group, this uptick was a result of very low ground floor retail inventory being concentrated in more desirable locations along the corridor, which drove the average asking rent upward.
- Downtown on Fulton Street, between Boerum Place and Flatbush Avenue, the ground floor retail average asking rent increased eight percent year-over-year to $326 per square foot. Deals in this corridor have been moving at a brisk pace due to new residential projects being completed nearby and chances of retail spillover from the City Point project. The Brooklyn Retail Report Advisory Group says that City Point is shifting the core of the Fulton Mall corridor closer to the project and its symbiotic opportunities.
REBNY’s Brooklyn Retail Report analyzes the average, median, and range in asking rents for available ground floor retail spaces in Brooklyn’s top retail corridors. Data for the Brooklyn Retail Report, which is published twice per year in the winter and summer, was provided by REBNY members from the Commercial Brokerage Brooklyn and Retail Committees.