BROOKLYN — Though retailers across the country are having a dismal time as Amazon increasingly lures shoppers online, Brooklyn’s main retail corridors are still in demand, according to an analysis by the Real Estate Board of New York.
Foot traffic is increasing in many parts of the borough thanks to new hotels, offices, and residential development, according to the report released this week, with retailers eyeing rapidly changing areas including Bushwick and Crown Heights. Average asking rents for retail spaces were up year-over-year in 10 of the 15 retail corridors the report examined.
“New developments are drawing more attention, particularly from retailers that are looking to develop a presence in Brooklyn as an extension of their Manhattan mainstays,” John Banks, REBNY president said in a statement. “In spite of shifting national retail market conditions, Brooklyn continues to present attractive storefront opportunities in growing, more densely populated neighborhoods.”
Prices jumped in Park Slope and Prospect Heights' retail corridors.
Park Slope’s Seventh Avenue, between Union and Ninth streets, saw year-over-year prices spike 35 percent to an average asking rent of $124 per square foot. It was down, however, from the winter’s asking rents of $129 per foot.
In Prospect Heights, the average asking rent for Flatbush Avenue, between Fifth Avenue and Grand Army Plaza — now home to a slew of boutique fitness spaces such as SLT, SoulCycle and Orange Theory — increased 7 percent this summer compared to a year earlier. The average asking rent on this corridor is now $109 per square foot. REBNY attributed the jump in price and shrinking vacancies to the popular Barclays Center bringing more traffic to the neighborhood as well as an influx of new residents in recently completed residential developments.
Park Slope’s Fifth Avenue between Union and Ninth streets saw a 19 percent increase in the average asking rents this summer compared to the previous summer. The increase to $95 per square foot was a result of lower inventory than the year before with remaining availabilities grouped in the more expensive segment of the corridor, which pushed up the overall average asking rent, the report said.
It was the first significant rise in average asking rents since REBNY began keeping track in 2015.
Mark Caserta, executive director of Park Slope’s Fifth Avenue Business Improvement District, said that small businesses were concerned by the rising rents, and when he walked the entire 3-mile corridor of this BID on Thursday morning, he found that the vacancy rate was about 8 percent, which was higher than the 6.5 percent he estimated a year ago.
“Generally speaking,” he said, “as the rents go up it becomes harder to make a profit. There’s a lot of concern about that.”
Rents shot up along the northern part of the corridor when Barclays Center came in because landlords believed the foot traffic would go up.
Caserta, however, said that hasn’t exactly panned out.
On days with basketball games for the Nets, stores rarely get more traffic. They fare better on concert days and best on Islander hockey game days, especially the restaurants and bars.
“Honestly, I think there’s more of a tradition of drinking for hockey games,” Caserta said. “It’s a shame they plan to leave,” he said of the Islanders, who plan to return to Long Island.
Small businesses are struggling across the city, Caserta said.
“It’s rent. The minimum wage is going up – I’m not saying that grudgingly, but it’s another cost. Amazon is growing by leaps and bounds. All the small businesses are caught in the middle.”
Meanwhile, asking rents dropped 21 percent on Montague Street in Brooklyn Heights, between Hicks Street and Cadman Plaza, to $151 per square foot, and they dropped 13 percent in Williamsburg’s Bedford Avenue, between Grand Avenue and North 12th Street, due to a larger amount of vacant storefronts located on the north end of the corridor.
Still, asking prices in the trendy Williamsburg area remained the highest in the borough at $325 per square foot.