Residential development is boosting the growth of Brooklyn’s retail market, driving rising rents in some neighborhoods and contrasting the turmoil seen in several mature Manhattan shopping districts, according to a new report.
Greenpoint and downtown Brooklyn had the biggest rent growth among the hot spots, conducted by real-estate services firm GFI Realty Services LLC. Average asking rents for ground-floor space on Greenpoint’s Franklin Street corridor hit $89 a square foot in the first quarter of 2017, a 42% jump from the $63 a square foot recorded in the same period the previous year. Ground-floor asking rents on the downtown Fulton Street section rose 8% to $325 a square foot, the report said.
However, Williamsburg’s Bedford Avenue corridor, among the borough’s priciest retail areas, experienced a dip in ground-floor asking rents, falling 18% from $359 a square foot to $295 a square foot, the report said. Retailers have taken a wait-and-see approach after a rush to enter the neighborhood rapidly escalated prices, said GFI President Michael Weiser.
The looming 2019 partial shutdown of service on the L train, the neighborhood’s main subway line into Manhattan, has exacerbated the dip, Mr. Weiser said. But development is continuing and condominiums sales are still averaging about $1,400 a square foot, according to the report.
Part of the reason behind the significant increases in areas besides Williamsburg is that the borough was starting from significantly lower price levels than the city’s developed shopping districts, Mr. Weiser said. Despite being a dense metropolis, the borough was “under-retailed from a national perspective” for many years, he said. But that is changing.
Greenpoint, where condos are selling on average for more than $1,200 a square foot, is expecting to add 10,000 new apartments before the end of 2019, the report said. In downtown Brooklyn, about 5,000 apartments are expected to be built by 2022, the report said. Already development has changed the landscape with an influx of national retail brands such as Republic on Fulton Street.
Source: The Wall Street Journal