NEW YORK CITY—Brooklyn's astounding performance in the multifamily and office sectors is being felt in retail too. The borough has 33 new retail corridors this year—bringing it to a total of 121 such areas—according to newly released research.
The 2015 Brooklyn Retail Report, prepared by CPEX Real Estate Services, indicates that 27 of the 33 new retail corridors identified in the annual report are new while the remaining six came from the division of preexisting corridors, due to the market's shifting landscape.
The report reveals a tale of two Brooklyns. Southern Brooklyn didn't see as much retail growth while north of Prospect Park experienced significant retail expansion, especially the neighborhoods of Park Slope, Williamsburg and Crown Heights. Those areas have the highest retail corridor density in the borough, with a total of 35 corridors between them. As part of this overall growth, a number of national retail leaders—including Apple, JC Penney, and Neiman Marcus— announced new operations in Brooklyn for the first time in 2014.
“The growth of retail corridors in Brooklyn over the past two years has been huge, fueled by a number of non-retail drivers, such as an increase in residential developments and an exceptionally low office vacancy rate,” says Ryan Condren, managing director of the CPEX New York retail leasing team. “As more retailers flock to the borough, we are not only seeing an increase in the total number of retail corridors, but also a significant jump in price as well, with two corridors at over two hundred dollars per square foot for the first time ever.”
Several factors of Brooklyn's growth are fueling retail's spread across Brooklyn, CPEX reports. Residential development is continuing at a rapid pace. Since 2013, the number of new permits in Brooklyn is up 116%, a 149% increase over all other outer boroughs combined. The office vacancy rate in Brooklyn is down to 4.2% while the education sector is doing well in the borough and, on the hotels front, there are 50 properties in place and another 21 in the pipeline.
Areas and developments such as Bedford Stuyvesant and Industry City have had a significant impact on the growth of retail in Brooklyn. Retail demand has spiked in Bedford Stuyvesant as a result of an influx of new residents, with 33 new retail locations opening in 2014. The evolution of Industry City from a classic industrial center to the “Soho of Sunset Park” has created new opportunities for retailers. This includes Bed, Bath & Beyond, which signed a lease along with three of its subsidiaries for over 100,000 square feet at the Liberty View Industrial Plaza.
Highlights of retail corridors with significant activity over the past year, CPEX notes, include two side streets that now have a notable retail presence with some of the more expensive rental rates in the borough:
North 4th street between Kent and Bedford avenues and Union Street between Nevins street and 4th avenue):
The former wasn't a corridor two years ago yet today, it is one of the most active retail corridors in Brooklyn. It's priced at $100 to $149 per square foot. Leading retailers, including Whole Foods, Joe Fresh, New York Sports Club and more have all taken up space in and around the area.
The latter corridor is home to several noteworthy retailers, including Dinosaur BBQ, the Royal Palms Shuffleboard Club, and Ample Hills Creamery. This stretch of Union Street benefits from being nestled between the Park Slope and Carroll Gardens neighborhoods.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
