The report looked at 17 major corridors and found that average asking rent per square foot increased along 10 of them year over year. Landlords are offering retailers fewer concession packages as well, even as rents remain below their pre-pandemic peaks at far less than $250 per square foot in most corridors.
Low availability caused multiple corridors to see major rent increases compared with REBNY’s winter Brooklyn retail report, released in late April. The average asking rent increased by 91% in Dumbo, 74% along Court Street in Cobble Hill and 43% along Bedford Avenue from North Eighth Street to North 12th Street in Williamsburg.
The corridor with the highest average asking rent was North Sixth Street between Driggs Avenue and Kent Avenue in Williamsburg at $208 per square foot, although this was actually an 8% drop from the winter of 2022 and on par with the all-time low it hit in the summer of 2015, according to the report. Some retailers are signing leases for well over $300 per square foot in Williamsburg, and rents for new spaces set to arrive next year could hit more than $400 per square foot.
The lowest average asking rent was on Franklin Street between Meserole Avenue and Commercial Street in Greenpoint at $66 per square foot, down 25% from the winter.
Two corridors actually hit new all-time highs for average asking rent: Court Street between Atlantic Avenue and Carroll Street in Cobble Hill at $200 per square foot and Court Street between Atlantic Avenue and Pierrepont Street in Downtown Brooklyn at $181 per square foot.
The lack of available space along prime corridors has sparked many retailers to look at emerging corridors. Streets including Myrtle Avenue in Fort Greene and Clinton Hill, Flushing Avenue in Bushwick and Montague Street in Brooklyn Heights saw several lease signings over the summer, the report says.
Brooklyn’s retail market has recovered faster than Manhattan’s overall since the pandemic hit, beginning its turnaround in late 2020, according to REBNY. Many of the challenges it faces are macroeconomic rather than specific to the borough. These include inflation and rising mortgage rates cutting into shoppers’ disposable incomes, along with a tough financial and regulatory market causing developers to hold off on making big investments in the borough.
Demand appears to be staying strong heading into the winter despite these economic headwinds, with some brokers telling REBNY they saw activity and tenant interest increase early in October.