In the last two decades, Brooklyn has made great strides in attracting retail stores to the borough, but it’s still significantly under-retailed compared to the top 50 largest markets in the country, according to a new study released by the Brooklyn Chamber of Commerce. The Chamber’s Economic Assessment of the Brooklyn Economy found that on average, the top 50 markets have 55 s/f of retail space per capita, while Brooklyn has only 23 s/f of space per person. To put it into perspective, Brooklyn has only a fraction of the retail square footage that Long Island has, even though the population is nearly the same. The Chamber study found that Brooklyn has a major “Retail Gap” with total retail leakage over $6.5 billion. Residents are going elsewhere for motor vehicles, gas stations, general merchandise, and food and beverages. The study also estimated an additional $1.1 billion leakage in food services and drinking places. Although 10 Brooklyn restaurants earned one or more Michelin Guide stars in 2015, the borough only has 168 bar and restaurant establishments per 100,000 residents versus 518 per 100,000 residents in Manhattan. The demand for retail in Brooklyn has grown along with an influx of new residents. Between 2010 and 2014, Brooklyn’s population increased by 117,093 to over 2.6 million, and it remains the fourth largest city in the country. With new residential and hotel construction throughout the borough, the demand for retail will undoubtedly rise. In downtown Brooklyn alone 19,000 new units were recently completed, are under construction, or in the pipeline, and throughout the borough over 2,500 hotel rooms are expected to come online in 2015 and 2016. The good news is that in five categories, including health and personal care and clothing, Brooklyn had a retail surplus of about $1.48 billion. International, national, and regional retailers have been entering the Brooklyn market with greater frequency. Since 2009, the borough has attracted Apple, Madewell, J. Crew, Whole Foods, Uniqlo, Lululemon, Nordstrom Rack, H&M, Sephora, Shake Shack, the Gap Factory Store, and Banana Republic Outlet. In addition, the Brooklyn brand is so strong that local retailers are exporting it. The future of the borough’s retail sector was the topic of a panel I recently moderated at Bisnow’s State of Brooklyn event. Panelists Chris Conlon, COO of Acadia Realty Trust; Kathryn Welch, executive vice president of Forest City Ratner; Toby Moskovits, CEO of Heritage Equity Partners; and Steven Hidary, COO of Hidrock Properties, discussed how their projects are working to fill Brooklyn’s retail gap. Acadia is developing City Point, a 1.8 million s/f mixed-use development that will include retail, residential, entertainment, and office space. Conlon said City Point’s 675,000 s/f of retail space will be anchored by Century 21 Department Store and City Target and all stores will be open by next year. Conlon said City Point’s 31,000 s/f DeKalb Market Hall will resemble an international market and house 55 food vendors including Katz Deli, the iconic deli that opened at 205 Houston St. in 1917, Pain d’Avignon, Brockman’s Pig Roast, Ample Hills Creamery, Paella Shack, Fulton Landing Seafood Company, Bun-Ker, the Arepa Lady, Cuzin’s Duzin’s, Coolship, Fletcher’s BBQ, and Bread & Spread. Forest City Ratner is developing the 22-acre Pacific Park at Atlantic and Flatbush Aves., which will include 6 million s/f of residential space. Additionally, the project’s 250,000 s/f of retail space will be integrated with the public spaces and Barclays Center to create “a new retail neighborhood,” Welch said. Forest City Ratner is planning a project at the intersection of Atlantic and Flatbush Aves. that will include vertical retail similar to the Time Warner Center. Welch said more retailers are accepting that downtown Brooklyn is a great place to locate because it has a diverse population, great transportation, densely populated residential neighborhoods, and other major retailers have had a track record of success. Forest City Ratner’s Atlantic Terminal at Atlantic and Flatbush Aves. across from the Barclay’s Center is home to a Target and Payless Shoe Store that are the top performers in those chains, and a Children’s Place store that is one of that chain’s top five performing locations. Additionally, the mall is attracting new, upscale retailers such as international apparel chain Uniqlo. Moskovits is developing a 400,000 s/f office complex for tech tenants at 25 Kent Ave. and observed that Brooklyn is being transformed from a borough into a city. In addition to downtown Brooklyn, many international fashion retailers are following the L line and opening in Williamsburg and Bushwick. Hidary, whose firm has mixed-use properties along Atlantic Ave., said national tenants would be wise to open anywhere in Brooklyn. His firm owns Park Slope’s Pavilion Movie Theater and is currently planning to develop condos on the site. The evolution of Brooklyn’s retail development reminds me of the famous phrase from the movie Field of Dreams, “If you build it he will come.” As the borough grows and continues to build more residential projects and hotels, retail will follow, and developers like the ones featured on Bisnow’s retail panel will be among those ensuring that the borough’s retail needs are met. Brad Cohen is the senior director of Eastern Consolidated, New York, N.Y. Tags: