By John Banks, REBNY President
Last week, I had the opportunity to meet with REBNY members to officially release our Inaugural Brooklyn Retail Report, which recognizes the industry’s ever-growing interest in Brooklyn and analyzes its continuing growth.
At the La Defense café in MetroTech, we discussed the combined efforts of both the REBNY Brooklyn Committee and the Retail Committee to produce the report.
With the help of REBNY retail brokers from each committee, the report provides insights on several major retail corridors in the borough and serves as a guide to an in-depth understanding of the Brooklyn Retail Leasing Landscape.
Specifically, the report analyzes 15 retail corridors in 10 neighborhoods, from Greenpoint in the north to Bay Ridge in the south. Among the data collected and used from these retail brokers were their available listings in the Third Quarter of 2015, and REBNY plans on releasing this report twice a year, with the next report scheduled for the First Quarter of 2016.
“With the collaboration of tracked data based on a number of key market indicators, brokers, owners and tenants will have a more thorough understanding of the Brooklyn retail environment, which has become a critical market for established retailers,” said Nicole Liebman of Cushman & Wakefield and member of REBNY’s Commercial Brokerage Brooklyn Committee.
The report itself reveals fundamental changes taking place in the Brooklyn retail corridors.
Changes in Brooklyn’s neighborhoods are resulting in changes in the kinds of goods and services that are in demand, and rezoning in many of those neighborhoods is changing their residential and commercial density.
In addition to new major landlords looking to maximize their properties’ value and smaller long-time property owners looking for constant returns without investing in improvements to their properties, these factors as well as the rezonings have led to a wide variety in asking rents between properties as close as next door to each other.
“Without reliable information on the Brooklyn retail leasing market, some tenants may be hesitant to move forward with opening new locations and expanding their brands in the borough,” said Mitzi Flexer, of Cushman & Wakefield and a member of REBNY’s Retail Leasing Committee.
In Brooklyn, one of the most diverse counties in the world, no one trend description can be applied evenly throughout the entire borough. Each corridor has its own atmosphere, pedestrian traffic, and building conditions which also impact asking rents.
For example, there are neighborhoods that have been established for generations which have smaller spaces and ownership that shows no interest in straying from their tried-and-true methods of property management.
However, there are also a good deal of neighborhoods with very new residential development and large ground-floor retail space, which are in stark opposition with those older neighborhoods. In these instances, owners are investing in their properties to attract major retailers.
REBNY’s report provides asking rents for these corridors and relies heavily on its advisory group, comprised of active brokers in the borough, to ensure that the retail information in our report is an accurate representation of the asking rents in each corridor.
Highlights from the report include the Bedford Avenue corridor, which has changed tremendously through its several phases of development and now has the highest average asking rent out of any Brooklyn corridor at $347 per square foot.
The highest average asking rent in a corridor south of Downtown was on Court Street between Atlantic Avenue and Carroll Street, where the average asking rent for ground floor space was $162 per square foot. This report is important not only for the data it contains, but because it provides a benchmark for conducting analyses in the future.
REBNY believes that this was an opportune time to compile this retail information, and with the help of its committee members, it not only gives our industry a marker from which to track future retail asking rent growth, but it also provides retail professionals with a comprehensive view of retail costs in the borough and what the future might hold for Brooklyn’s retail corridors .
In other REBNY News:
REBNY’s Commercial Brokerage Division will be hosting “Going Long on Long Island City: The Hot LIC Market and Its Impact on Manhattan,” on October 27 in the Mendik Education Center. Breakfast will be served from 8:00 a.m. to 8:30 a.m., and there will be a panel discussion from 8:30 a.m. to 10:00 a.m. featuring moderator Mitch Arkin, David Brause, Steve Klein, David Robinov, and Gal Sela. This event is free for REBNY members and $20 for non-members. To register, contact Ossie Shemtov at OShemtov@rebny.com.
The 27th Annual Residential Deal of the Year Awards and Charity Gala will be held at Pier Sixty at the Chelsea Piers on Wednesday, October 28 from 6:30 p.m. to 11 p.m. The Residential Brokerage Division encourages you to attend one of the biggest and most highly anticipated industry events of the year, and to also congratulate the night’s award winners. To make a reservation, visit www.rebny.com, or contact Jeanne Oliver-Taylor at JTaylor@rebny.com.
REBNY’s Members’ Luncheon will take place on November 4 at the Hilton New York from 11:45 a.m. to 2:00 p.m. It will feature a panel discussion, “Big Picture, Big Deals of 2015 and Beyond…,” moderated by Mary Ann Tighe, CEO of the New York Tri-State Region of CBRE, and the panelists include Tim Callahan, CEO of Callahan Capital Properties, Maryanne Gilmartin, CEO and President of Forest City Ratner Companies, and David Levinson, Chairman & CEO of L&L Holding Company, LLC. To register, visit www.rebny.com or contact Desiree Jones at DJones@rebny.com.
The 9th Annual Building Service Awards is on November 5 at 32BJ SEIU, 25 West 18th Street, from 5:30 p.m. to 8 p.m., and will be a recognition and celebration of the people who keep our homes, offices, schools, and public buildings clean and running smoothly. To nominate someone, visit www.bsw-awards.com.