Latest Brooklyn Retail Report Shows Strong Demand Fundamentals and Emerging Supply Constraints for Larger Storefronts

NEW YORK, NY –The Real Estate Board of New York (REBNY) today released its latest Brooklyn Retail Report, which examines rent and leasing along major retail corridors in the borough for January through October of 2024. The latest iteration of the study showed supply of larger spaces tightening and continued strength in Food & Beverage and Fashion sectors, while average asking rents remain below pre-pandemic levels and retailers report persistent challenges to opening and operating stores.

The average asking rent in 13 of 17 corridors in this report is still below pre-pandemic levels. Most Brooklyn corridors are priced 15% to 30% below their prior peaks, even in relatively tight neighborhoods such as Park Slope and Cobble Hill. There is ample supply renting for less than $100 per square foot in multiple areas like Bay Ridge, Brooklyn Heights, and Greenpoint, but these smaller storefronts generally offer negligible buildout allowances and building services.

Average asking rents in 12 of 17 corridors are up from one year ago, with the highest increases along Bedford Avenue (Grand St-North Eight St) in Williamsburg, Seventh Avenue (Union St- Ninth St) in Park Slope and the four primary retail corridors in Dumbo. Recent transactions in these neighborhoods include With Others at 340 Bedford, Woof Gang Bakery & Grooming at 217 7th Avenue and Kith Kids opening at 55 Water St.

Residential corridors like Brooklyn Heights, Cobble Hill and Greenpoint were the first to rebound following the height of the pandemic but are now facing slight moderation in leasing as residents return to work during the daytime. Nevertheless, brokers surveyed in the report cite strong demand fundamentals as reason for optimism in the market. This includes an expanding residential base. For example, population in Downtown Brooklyn alone grew by 16% between 2018 and 2022, tripling New York’s growth during the same period. Extensive new residential development is also opening opportunities for a wide range of retailers.

While demand is strong across many corridors, supply dynamics vary. Smaller retailers have ample space options. Among the 17 corridors tracked in this report, nearly 80% of the available spaces are 2,500 square feet or less (based on ground-level space). Larger space users, including gyms, healthcare, education, and grocery stores, have far fewer options unless they go to lower-density neighborhoods with more limited access to mass transit.

Retailers face persistent operational challenges that have impacted a more vibrant retail recovery. This includes delays in licensing and permitting approvals, inadequate staffing and inventory shrinkage.

“While retail asking rents trailed pre-pandemic peaks in most Brooklyn neighborhoods, we have seen year-over-year rent growth in the majority of corridors and vibrant competition for larger spaces so far during 2024,” said Keith DeCoster, Vice President of Market Data and Policy at REBNY. “The recent deceleration in the housing pipeline limits the quality space options for larger retailers as well as service providers like health care, schools and community facilities that are key to the Brooklyn’s high quality of life.”

The full report and analysis, along with other studies on the New York City real estate market and industry by REBNY, can be found here.
# # # #

ABOUT THE REAL ESTATE BOARD OF NEW YORK

The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association. Founded in 1896, REBNY represents commercial, residential, and institutional property owners, builders, managers, investors, brokers, and salespeople; banks, financial service companies, utilities, attorneys, architects, and contractors; corporations, co-partnerships, and individuals professionally interested in New York City real estate. REBNY conducts research on various civic matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes, and other city, state, and federal legislation. REBNY regularly publishes market data, policy reports, and broker surveys. In addition, REBNY provides for its members: informational, technical, and technological resources; networking and charitable service opportunities; qualifying and continuing education courses; professional education programs, seminars, and designations; career-changing awards; legal advice; and a wide range of additional member benefits. For more information, please visit www.rebny.com.

MEDIA CONTACT:

Chris Santarelli

press@rebny.com

(212) 616-5249