Da’ Brooklyn lodgers
Retail rent surges in building boom
RESIDENTIAL and hotel developments in Brooklyn neighborhoods including the Barclays Center area are not only keeping retail alive but causing it to flourish.
Average asking rents are higher than a year ago in 10 of the 15 main Brooklyn shopping corridors, a new report from the Real Estate Board of New York reveals.
“Generally, Brooklyn looks to be doing well from a retail point of view,” says
Mike Slattery, senior vice president of research at REBNY.
Even better, it’s not just concentrated near new development. “The resurgence is across the borough,” Slattery says
But average rents are riding roller coasters as the priciest or cheapest spaces are leased or added to the market.
Bedford Avenue, running from Grand Avenue to North 12th Street, has the highest borough asking rents, now ranging from $130 to $600 per square foot. Over the summer that high was $400 per square foot, but a year ago, the least pricey space was $200 per square foot with a high of $500 per square foot — all because differently priced spaces go on and off the market.
Bedford Avenue is almost two different markets, with big open restaurants on the northern end above 8th Street and smaller shops on the southern end.
“You can walk and do your shopping and then eat,” said REBNY’s chief economist, Brian Klimas.
Another bright spot is Smith Street in Cobble Hill, where rents average $149 per square foot, up 22 percent from this winter’s $122 per square foot and up 12 percent from $134 in the summer of 2016.
Similarly, Park Slope’s Fifth Avenue, from Union Street to 9th Street, has a current asking rent of $94 per square foot, up 20 percent from the winter’s $78 and 18 percent higher than $79 in the summer of 2016.
Availabilities are now grouped in the pricier north end, REBNY found, while Park Slope’s Seventh Avenue has seen similar rent increases.
Barclays Center and the new residential projects in Prospect Heights have boosted nearby retail rents along the Flatbush Avenue corridor between Fifth Avenue and Grand Army Plaza because there are fewer available spaces, especially to serve hungry Barclays patrons. Asking rents range from $78 to $125 per square foot and average $109, up 7 percent from $101 last summer.
But on Dumbo’s small shopping streets of Washington, Front, Water and Main, current average asks of $104 per square foot are 18 percent lower than last winter’s average of $127 per square foot and are down 8 percent from a year ago, when they were $113 per square foot.
Rents are also lower in Brooklyn Heights, where they dropped to $151 per square foot, 19 percent lower than last winter’s $188 and 21 percent lower than the $190 per square foot asked in the summer of 2016.
In Manhattan, CBRE reported third-quarter retail rents dropped in 12 of 16 shopping corridors by an average of 13 percent since last year. The average retail asking rent is now $711 per square foot, down from $820 a year ago.
Remember that rents in Manhattan are generally pricier. Times Square rents fell 6 percent from $2,225 to $2,086 per square foot — a bargain if you want to be in that tourist area with long shopping hours.
The highest rents are still along Fifth Avenue from 49th to 59th streets and rose 13 percent from $3,025 to $3,412 per square foot. Meatpacking’s 14th Street rents rose 20 percent from $293 to $351 per square foot — with Washington Street up 6.5 percent to $550.
In the Flatiron District, Fifth Avenue rents are up 15 percent from $354, to $406 per square foot, while Broadway declined 4 percent from last year’s $408 per square foot to the current $393 per square foot.