The “transition” that Brooklyn is currently experiencing will have a very positive impact on the borough’s retail market in the coming years, according to a report recently released by Marcus & Millichap Real Estate Investment Services.
The statistics in the firm’s second-quarter Brooklyn Retail Research Report speak for themselves.
Because of increased tenant demand in up-and-coming areas like downtown Brooklyn, retail asking rents will increase to $36.93 per square foot in 2007, a 5.5 percent increase over last year, according to the report. The report also noted that vacancy will remain limited in buildings of 100,000 square feet or more.
Perhaps the most eye-popping statistic related to the increase in development, though.
This year, developers are building 660,000 square feet of new retail space in the borough, according to the report. That number has increased twenty-fold over last year’s paltry 33,000 square feet.
The full release about the report is below.
MAJOR TRANSITION TO HAVE A POSITIVE IMPACT ON
BROOKLYN’S RETAIL MARKET
BROOKLYN, NY, June 19, 2007 – The borough of Brooklyn is clearly undergoing a transition that will have a profound effect on the local retail property market in the quarters and years ahead, according to a second-quarter Retail Research Report released by Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm. Retailers seeking to capitalize on the current and anticipated wave of residential growth have sustained a strong retail property market, as leasing has accelerated recently and vacancy hovers around 5 percent.
“Local investors are sustaining a healthy pace of activity in the Brooklyn retail market,” states J.D. Parker, regional manager of Marcus & Millichap’s Brooklyn office. “Single-tenant property transactions predominantly involve buildings with street-level retail and a residential component on the upper floors.”
The following are some of the most significant aspects for the Brooklyn Retail Research Report:
· In the borough of Brooklyn, employers will add 3,400 jobs in 2007.
· Developers are expected to complete 660,000 square feet of retail space this year, compared with only 33,000 square feet in 2006.
· Buoyed by tenant demand for quality spaces along established or emerging retail corridors in areas such as downtown, asking rents will rise 5.5 percent this year to $36.93 per square foot.
· Vacancy remains tight in the buildings measuring 100,000 square feet or more, which are generally newer buildings with modern layouts.
· Multi-tenant properties with stable tenancies will continue to sustain investors’ interest.
For a copy for the Brooklyn Retail Research Report, as well as reports on other markets nationwide, visit our website at http://www.MarcusMillichap.com
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With more than 1,300 investment professionals in offices nationwide, Encino, Calif.-based Marcus & Millichap Real Estate Investment Services is the largest commercial real estate brokerage in the nation focusing exclusively on real estate investments. In 2006, the firm closed $20.5 billion in transactions. Founded in 1971, the firm has perfected a powerful system for marketing properties that combines product specialization; local market expertise; the industry’s most comprehensive research and analysis capabilities; state-of-the-art technology; and established relationships with the largest pool of qualified investors nationally.