Brooklyn Retail Report - Second Half 2023

Steady Activity Along Prime Corridors, Pullback in Demand from Some Sectors

Brooklyn’s retail sector registered healthy leasing throughout 2023 as new market entrants supplemented expansion by local firms. The most active retailers are chasing Brooklyn’s growing and increasingly high-density residential base.

But there is a great deal of divergence in the pace of activity from one neighborhood to
another, and even one street to the next. Leasing and rental rate growth is the strongest
in prime residential neighborhoods and in innovative shopping destinations like City Point
and Industry City. Conversely, other neighborhoods have significant vacancies due to
natural tenant turnover, recent multi-family deliveries, and moderating demand from
banks and pharmacies.

Retailers have seen some relief in inflation and material costs, but they still face familiar
hurdles to business setup and operations in 2024, including staff shortages, retail theft, and
quality of life issues, as well as new issues like growing licensing and permitting delays.