Bedford Avenue in Williamsburg has some of the highest commercial rents in the US. These Brooklyn retail districts could be close behind.
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Bedford Avenue in Williamsburg has experienced an average rental increase of 477 percent over the last decade. It's the kind of steroidal growth that, in the wake of rampant gentrification, all commercial landlords in some of Brooklyn's busiest thoroughfares are hoping to emulate. Crain's took a look at some of the contenders. Using CPEX Real Estate's annual report, which tracked asking rents across Brooklyn, they discovered that retail strips in many of the gentrifying neighborhoods could be set catch alight financially.
Emerging neighborhoods clearly have the most room to grow, with new glassy condos increasing their population while improved transportation helps accessibility to Manhattan and elsewhere. Many "emerging" neighborhoods are saying goodbye to traditional mom and pop stores and welcoming in corporate businesses.
Industry City's growth in Sunset Park will cause the neighborhood to flourish on Fourth Avenue with national retailers like Bed Bath and Beyond and Saks already in the area. That said, CPEX showed that out of the 130 retail corridors it tracked only the six mentioned above showed an annual increase in rent, showing that the market is perhaps stagnant with rents already caught up with demand.
Online shopping on Amazon poses a huge threat to retail shopping. In Manhattan, 41 percent of new leases were for bars and restaurants. They have certainly been associated with gentrification throughout Brooklyn— along with realtor offices, yoga studios and niche stores with unique products unavailable on Amazon. Also popular are healthy grocery stores, such as Whole Foods and Trader Joe's, which have been expanding their Brooklyn footprint recently to keep up demand from new tenants.
There may be a point in Brooklyn's retail future, where the rents are just too high even for some of the corporate chains to justify doing business. This has been seen in the West Village in Manhattan where along with quirky artistic stores, the likes of Starbucks have also shuttered its doors. Termed by the New Yorker as high-rent blight, a boarded up store is never good for an area, whether it's in East New York or the East Village. It's fostered the appearance of "pop-up" stores on seasonal basis in Times Square but they, by nature, are transient and transience is exactly what every high-end neighborhoods want to avoid if they want to continue justifying the rents they charge.