Pandemic-era concessions and highly discounted rent in rearview mirror in core locations; more flexible terms can still be found in emerging areas
NEW YORK, NY –The Real Estate Board of New York (REBNY) today released its Winter 2022/2023 Brooklyn Retail Report based on findings gathered from November 2022 to May 2023. The full report can be seen here.
The Winter 2022/2023 iteration of the biannual report highlights healthy demand across multiple prime Brooklyn corridors. Retailers have faced challenges in finding quality space in the most sought-after corridors like those in Williamsburg and Cobble Hill, but opportunity exists and landlords are still offering more flexible terms in emerging areas like Sunset Park and Bushwick. Brokers note that activity has been fluid with leasing ranging from national chains in the busiest corridors to small business owners planting their flag in Brooklyn’s top residential neighborhoods. Members of the retail community speaking to REBNY in the preparation of this report see no short-term signs of contraction.
Persistent demand has depleted availability of quality storefronts in many of the most sought-after corridors. In turn, average vacant asking rent per square foot increased year-over-year in 12 of the 17 major Brooklyn retail corridors analyzed for this report. Two of these markets, North 4th St. in Williamsburg and Court St. in Downtown Brooklyn, have average vacant asking rents exceeding all-time highs. The delivery of new housing units in many Brooklyn neighborhoods has benefited owners of retail properties with an influx of interest from national chains, luxury brands and acclaimed restaurant groups. New stores in Williamsburg and Downtown Brooklyn in recent months include Chanel Beauty Store, Sugarfish, Dave’s Hot Chicken and Avocado Green Mattress.
With less availability, higher priced rents and the end of peak pandemic-era concession packages in prime corridors, retailers are exploring lesser-known areas. Brokers say Grand Street and farther afield in North Williamsburg present viable options for tenants willing to work with smaller floorplans, and light industrial buildings in Sunset Park and Bushwick are garnering interest despite often requiring the tenant to assume more out of pocket buildout costs.
“In addition to the activity in Williamsburg and Downtown Brooklyn, competition among retailers is fierce right now for the few openings along retail corridors in Brooklyn’s residential enclaves,” said Keith DeCoster, Director of Market Data and Policy at REBNY. “Retailer interest continues to flow to neighborhoods with exciting new housing developments. Brooklyn’s vibrant and innovative retail sector will flourish and grow as long as new housing product also expands throughout the borough.”
Brooklyn’s retail market has been a bright spot in the City’s real estate sector since the recovery began 2021. While the increased costs of opening a storefront and the decline in new housing production in New York City present obstacles for sustained strength in retail leasing, REBNY members see few near-term signs of market contraction.
“The Brooklyn retail market continues to grow in size and scope, and is no longer a secondary market for national and international retailers,” said Steven Soutendijk of Cushman & Wakefield and Chair of REBNY’s Commercial Brokerage Retail Committee. “Brands now want their first store in NYC to be in Brooklyn, and new pockets of luxury, food and beverage, experiential and boutique retail are growing throughout the borough.”
Download the complete Winter 2022/2023 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.