Prime Residential Neighborhood Corridors & Innovative Shopping Destinations Enjoy Steady Demand in Brooklyn in Second Half of 2023

NEW YORK, NY –The Real Estate Board of New York (REBNY) today released its H2 2023 Brooklyn Retail Report, which examines activity along major retail corridors in the borough from July to December 2023. The latest iteration of the biannual report showed vigorous competition for space in prime residential neighborhood corridors as well as robust demand for space in emergent shopping destinations like Downtown Brooklyn’s City Point as well as Industry City in Sunset Park. For the first time since the retail recovery started in late 2021, activity has moderated in other lower-traffic areas, particularly as some sectors reduced leasing or closed a few locations.

Read the full report here.

The average asking rent in 12 of the 17 corridors included in the report was below its pre-pandemic peak level, with rents falling short of the peak from -11% to -59%. The decline averaged across the 12 markets was 21%.Despite these challenges, several large transactions in the most competitive neighborhoods resulted in rising rents and strong performance for the retail market in the second half of 2023, compared to previous reports.

Average asking rents grew year-over-year during H2 2023 in 13 of the 15 corridors analyzed in this report. Leasing was the most competitive along corridors in Williamsburg as well as sought-after residential neighborhoods like Park Slope, Cobble Hill and Brooklyn Heights. Businesses seeking greater availability and/or lower rents had more luck finding space in Greenpoint, Boerum Hill and Gowanus.

Destination retail experiences like Industry City in Sunset Park have continued to attract and secure expansion renewals for unique tenants. This includes the Brooklyn Made Store, which opened this summer and features Brooklyn-based designers, makers and entrepreneurs, mostly from communities of color, as well as Japan Village, a food hall run by Sunrise Mart that has announced it will add another 10,000 square feet to its existing 30,000 square foot space.

Luxury retail brands remained active in Williamsburg. In established residential neighborhoods like Park Slope and Cobble Hill food and beverage, boutique gyms, health and wellness retailers and private schools were active. The delivery of multi-family units also supported extensive recent leasing among grocery stores and schools in Downtown Brooklyn, Bushwick and Crown Heights. Brokers note though that in some neighborhoods it is taking longer to lease some of the ground-level space in newly delivered multi-family buildings.

Staff shortages and quality of life issues continue to inhibit business setup, while permit and licensing delays are impeding some lease completions and business openings. Brokers point to pullback among some banks, pharmacies and medical clinics as factoring into the subdued performance.

“Demand in areas with extensive multi-family deliveries such as Downtown Brooklyn remains strong. Retailers are vying for limited options in proven corridors in Williamsburg, Park Slope and Cobble Hill as well as emergent destinations such as City Point and Industry City,” said Keith DeCoster, Director of Market Data and Policy at REBNY. “During the last six months, though, local brokers as well as BIDs and chambers of commerce have called more attention to persistent challenges like staff shortages, quality of life issues and higher borrowing costs to finance business expansion that may be hindering business setup in some lower-traffic areas.”

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.

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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.

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