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REBNY Report: Brooklyn Retail Asking Rent Growth Simmers in Summer 2016
September 22, 2016
Availabilities in new residential developments fuel price growth; Bedford Avenue holds onto highest average asking rent despite anticipated impact of L train shutdown
Price growth for available ground floor retail space in Brooklyn’s top retail corridors improved modestly in Summer 2016 with average asking rents increasing in eight of the 15 surveyed corridors compared to last year, according to the Real Estate Board of New York’s (REBNY) newest Brooklyn Retail Report. The remaining seven corridors experienced either small decreases or no change at all.
The strongest rent growth occurred in areas with new residential development and the potential for increased residential density. The biggest increase in North Brooklyn was on North 6th Street, between Driggs Avenue and Kent Avenue, in Williamsburg where an increase in available spaces at new developments, not yet ready for possession, pushed the average asking rent up 24 percent to $259 per square foot for ground floor retail space.
Demonstrating how locational factors can impact asking rents, the rise in availability of midblock spaces along the corridor contributed to the six percent average asking rent decline to $144 per square foot on North 4th Street, between Driggs Avenue and Kent Avenue, in Williamsburg and 10 percent decline to $145 per square foot on Court Street, between Atlantic Avenue and Carrol Street, in Cobble Hill.
“Retail spaces coming onto the market from new developments are diversifying retail opportunities and driving up asking rents in these top Brooklyn corridors,” said John H. Banks, III, REBNY President. “Furthered by the desirability for unique retail options and foot traffic from visitors and local residents, retail real estate continues to be strong in demand in the borough.”
“While the impending L train subway service interruption between Manhattan and Brooklyn has been pinned by some as a potential inconvenience for shoppers traveling between the two boroughs, our Brooklyn Retail Advisory Group identifies that the suspension of service will not pose major difficulties for the retail market,” said Peter Levitan of Lee & Associates NYC, member of REBNY’s Brooklyn Retail Advisory Group and Chair of the Commercial Brokerage Brooklyn Committee. “The L train closure is just one factor impacting the market. Immense future development, trends in alternative transportation, and imminent changes in Williamsburg’s retail landscape have the potential to offset any loss of ridership. And once the construction is finished, the tunnel’s improved infrastructure will be able to accommodate more reliable and increased service to feed the retail landscape in Williamsburg and beyond.”
Other highlights of the Summer 2016 Brooklyn Retail Report:
- Since the inception of the Brooklyn Retail Report in summer 2015, the Bedford Avenue retail corridor, between Grand Street and North 12th Street, has maintained the highest average asking rent for ground floor retail space. This summer, its average asking rent registered at $373 per square foot, a seven percent increase year-over-year.
- Due to an influx of new retail availabilities, average asking rents in Brooklyn Heights on Montague Street, between Hicks Street and Cadman Plaza, increased 27 percent to $190 per square foot this summer compared to last year.
- Average ground floor asking rents in Cobble Hill’s retail corridors moved in opposite directions, as did those in Park Slope. In Cobble Hill, the average asking rent on Smith Street, between Atlantic Avenue and Carroll Street, rose 10 percent to $134 per square foot compared to last year, but on Court Street, between Atlantic Avenue and Caroll Street, rents dropped 10 percent to $145 per square foot. In Park Slope, the average asking rent for ground floor retail space on 7th Avenue, between Union and 9th streets, rose six percent to $92 per square foot, while rents on 5th Avenue, between Union and 9th streets, dipped two percent to $79 per square foot.
The Brooklyn Retail Report is published twice per year in the winter and summer, analyzing the average, median, and range in asking rents for ground floor retail spaces in Brooklyn’s top retail corridors. Data for the Brooklyn Retail Report was provided by REBNY brokers from both the Brooklyn and Retail Committees, and comprised of asking rent prices for their current, available ground floor retail listings.