Brooklyn retail committee members and other brokers active in the market described recent activity as strong and fluid. Retailers face challenges in finding quality space that matches their requirements in the most sought-after corridors like Williamsburg and Cobble Hill. Landlords in these select areas can carefully choose their tenants. Options and terms are more flexible in some emerging areas such as Sunset Park and Bushwick.
Businesses seeking storefronts for space on North 6th Street or Bedford Avenue in Williamsburg, for example, will have to act fast for prime space and be willing to pay top dollar. Retailers can find more options on Grand Street or farther afield in North Williamsburg, but the space on offer may be smaller or subpar quality. Light industrial buildings in Sunset Park and Bushwick continue to garner interest but often require the tenant to assume more out of pocket buildout costs.
Tenants must carefully consider the condition of the space and the services and tenant improvements offered by the owner. “As is” space will typically have a lower rent, but also a lower level of services and no improvement allowances. Some owners will extend more generous concessions to the most creditworthy tenants.
The opportunity phase of the market with generous concessions and highly discounted rent is over in core locations. Landlords in these areas can be selective in their choice of retail. Nevertheless, apart from a handful of areas, rent remains below pre-pandemic peaks.