NEW YORK, NY – The Real Estate Board of New York (REBNY) today released its Summer 2022 Brooklyn Retail Report based on findings gathered in April to October of 2022. The full report can be seen here.
The report found that retailer demand remained strong, which contributed to a depletion of storefront space this summer in prime corridors such as Bedford Avenue South in Williamsburg, Court Street in Cobble Hill and Franklin Street in Greenpoint. The lack of quality space led to a moderation in prime corridor leasing activity in comparison to the stronger activity that took place in 2021 and early 2022.
As a result of that strong demand and fewer options for retailers, as well as surging tourism and overall economic activity, a number of corridors saw increases in rent and fewer concession packages offered to tenants. Of the 17 major Brooklyn retail corridors analyzed for this report, 10 corridors saw average vacant asking rent per square foot increase from Summer 2021 to 2022.
While retailers were less likely to find space in prime corridors, they became more likely to seek out new options in emerging corridors, which saw increased leasing activity over the summer. This included a diverse array of lease signings along Myrtle Avenue in Fort Greene and Clinton Hill, Montague Street in Brooklyn Heights and Flushing Avenue in Bushwick.
“The depletion in quality space options in prime locations and resulting rise in leasing costs follows nearly two years of sustained activity in Brooklyn’s most sought-after retail corridors. During the Spring and Summer, demand from national and regional brands across more areas of the Brooklyn gave the market an added boost,” said Keith DeCoster, Director of Market Data and Policy at REBNY. “Even with the increased costs associated with prime storefront space, rent is still well below its pre-pandemic peak in most areas.”
Along with limited availability, the Brooklyn retail market still faces macroeconomic obstacles that have slowed leasing activity and may continue to create challenges moving forward. Inflation and mortgage rates are expected to continue to eat away at consumers’ disposable income. Consumer spending remains strong, but brokers surveyed for the report noted that a few property owners are reconsidering the scale or timing of investments in Brooklyn. Some owners, including multifamily developers, are holding off on major investments during a challenging regulatory and financing environment. This has the potential to inhibit the development and buildout of the next generation of retail spaces.
“Successful retailers, such as private schools, elevate the experience and service they provide to consumers,” said Peter Schubert, Managing Director at TerraCRG. “Over the course of the last six months, Brooklyn’s daycare and preschool offerings have expanded greatly. Daycare facilities like Tutu School and Playday provide programs in ballet and art. Recent expansion by language immersion preschools - Petits Poussins (French) and Mandarin Montessori preschool Ms Lam - added to the Pre-K choices for parents in Brooklyn.”
“Leasing lost a step during the Spring and Summer, but this was to be expected – following nearly two years of sustained activity, availability is limited,” noted Mitzi Flexer, Senior Director of Brokerage at Cushman & Wakefield. “As options in Brooklyn’s most sought-after corridors tighten, local businesses as well as some expanding national brands, are turning to emerging corridors like Myrtle Avenue and Flatbush Junction.”
Download the complete Summer 2022 Brooklyn Retail Report here.
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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.