Ryan Condren, CPEXBrooklyn has been a part of New York City for over a century, but 118 years after merging with the other boroughs, Brooklyn is striking out on its own again.
With our 2016 Brooklyn Retail Report, we wanted to see how Brooklyn retail stacks up against other cities and retail hubs across the U.S. Lo and behold, our seventh annual study found that Brooklyn has joined the same conversation as Rodeo Dr. in Los Angeles and North Michigan Avenue in Chicago to emerge onto the national retail scene not only in name, but also in price.
Of the top ten retail corridors nationwide, Brooklyn is now home to three: Bedford Ave. in Williamsburg, the only retail corridor in Brooklyn averaging more than $300 per s/f; the Fulton St. Mall in Downtown Brooklyn (a safe bet to also surpass $300 in next year’s report); and Court Street, also in Downtown Brooklyn. That is more than any other city in the United States, including Los Angeles, San Francisco, Chicago, Miami, and Washington, D.C. (Based on the average rent on a price per s/f basis, the comparison intentionally excludes New York, N.Y. as an outlier in the national retail market in order to create more realistic comparables. Still, even with Manhattan occupying three of the top four priciest retail slots according to data from The Fiscal Times and National Real Estate Investor, Brooklyn’s Bedford Ave. and Fulton St. would both still crack the top ten.)
The borough’s emergence on the national retail scene comes after our 2014 Brooklyn Retail Report noted nine Brooklyn corridors that doubled in average retail rents in just five years (2009-2014). This was followed by an 80% increase in the borough’s retail density from 2013 to 2015. In just two years, the borough’s notable retail corridors jumped from 67 in 2013 to 121 in our 2015 Brooklyn Retail Report.
With two of the nation’s top ten retail corridors located in downtown Brooklyn, much of the borough’s retail density has become concentrated in the area surrounding downtown, one of most popular retail destinations in not just the borough, but the entire city. In the 2.69 square mile area around Downtown Brooklyn, which includes neighborhoods such as Brooklyn Heights, Park Slope, and Carroll Gardens, we mapped more than 30 notable retail corridors. That total comprises 28% of the borough’s retail corridors concentrated in less than 4% of Brooklyn’s 71 square miles.
The CPEX 2015 Brooklyn Retail Report cites many of the driving factors that have led to Brooklyn establishing its presence on the national retail stage. This includes a wave of new residential developments in Brooklyn totaling more than 19,000 new unit permits; the lowest office vacancy rate (4.2%) in the country, which drops even lower in downtown Brooklyn; one of the country’s largest student populations attending 33 area universities, colleges and seminaries; a robust hospitality industry with 71 expected hotels by 2017; and an array of popular tourist attractions, from Barclays Center and the Brooklyn Academy of Music to the borough’s plethora of parks.
As a result of these driving factors, Brooklyn continues to welcome many national, brand name retailers looking to establish a presence in the borough. In the past year, this includes flagship Brooklyn storefronts for Wegmans, Nike, and Saks Off Fifth, a lease for Saks’ first outer borough location that was negotiated by my Brooklyn Retail Leasing Team.
So yes, the consensus that it was an error in judgement for Brooklyn to merge with New York City is certainly true. But even if the residents can’t reverse that ill-fated “Great Mistake of 1898,” the borough’s retail is doing its best to once again establish Brooklyn as its own standalone city.
Ryan Condren is a managing director at CPEX Real Estate, Brooklyn, N.Y.
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