Brooklyn, the borough of Coney Island, Prospect Park and the Dodgers of memory, is a hot property.
Population density, residential development and an understored retail environment has made Brooklyn one of the most sought-after retail locations in New York City.
Just as a flurry of new residential activity in Harlem and the Lower East Side begat upscale retail, real estate experts said new condominiums and rental properties will inevitably lead to higher-end stores — and rising rents for those retail properties.
"Brooklyn is booming," said David Rosenberg, executive vice president of Robert K. Futterman Associates. "As downtown Brooklyn transitions, the overall retail climate will go in a more upscale direction. Over the next five years we will see a significantly different retail climate."
When Forest City Ratner built Atlantic Terminal three years ago, the company targeted national chains. "A few guys like the Gap stepped up, but then back out," said Lon Rubackin, senior vice president of Forest City Ratner. "Bruce Ratner [chief executive officer] said, 'Let's wait and not rush.' Bruce was insistent about trying to upgrade. Community leaders would call and say, 'Why can't we get Victoria's Secret and Gap?' After a couple of years, we were able to convince Victoria's Secret to join the project and it's one of their best stores in the city. More and more national retailers are starting to find out about Brooklyn, and once they do, nobody's disappointed."
Forest City Ratner is preparing to build the 7.7 million-square-foot Atlantic Yards across from Atlantic Center and Terminal on the busy intersection of Atlantic and Flatbush Avenues. The 24-acre project is to include an arena for the Nets of the National Basketball Association, office towers, 6,000 to 7,300 housing units and 250,000 square feet of retail, which is described as being geared to residents with smaller shops and restaurants.
"A major professional sports team adds a whole other dynamic," Rubackin said. "There will be a link to the Long Island Rail Road, which connects to the South Shore. Atlantic Yards is a stone's throw from Wall Street and downtown Manhattan. That's a whole new crop of shoppers who never would have been there before."Rosenberg, who represented Trader Joe's in a deal on Atlantic Avenue, said Sports Authority is looking for a spot on the thoroughfare. Sports Authority executives could not be reached for comment.
The Junction, Triangle Equities' 250,000-square-foot retail complex rising at Flatbush and Nostrand Avenues near Brooklyn College, will be anchored by Target, which is said to be planning a vertical store. Triangle is also said to have deals signed with David's Bridal and Payless Shoes.
It seems as if few sections of the borough have been left untouched. Demolition has begun on the former Albee Square Mall, also known as the Gallery at Fulton Street. The property is being razed and recast by the developer Acadia as City Point, a mixed-use project with retail, residential and office components.
"I've been told that they have secured Target as a tenant," said Michael Weiss, executive director of MetroTech Business Improvement District and Fulton Mall Improvement Association. "There's about 600,000 square feet of retail available."
In downtown Brooklyn "Fulton Street...is really a regional shopping street," Weiss said. "It's open to a number of price points, especially in light of the development taking place downtown and the resurgence of the brownstone neighborhoods. You really have all income levels. My sense is [City Point] will attract a mixture of moderate price points as well as hold opportunities for some upgrading of merchandise."
The transportation infrastructure in downtown Brooklyn is being strengthened as streetscapes are improved. Renovation of the J Street and Lawrence Street subway stations are being undertaken to a tune of $110 million. In addition to new escalators and elevators, the facelift will include a tunnel connecting the two stations.
Weiss said the ease of transfer between subway lines will bring potential customers, "making it a much easier commute in and out of Brooklyn."
Flatbush Avenue and Fulton Street will get new streetscapes, including lighting, trees, bus shelters, benches and open spaces. Meanwhile, a new park called Willoughby Square has been approved for Willoughby Street between Albee Square West and Duffield Street and close to City Point. Also on Duffield Street, the Meridian Hotel is planned and a Sheraton Four Points is under construction.Weiss said the changes are not intended to drive away mom-and-pop stores and independents, a complaint of opponents of the development. "We have many strong local retailers and many of them will remain," he said.
Although established Brooklyn players such as Thor Equities chief Joseph Sitt, Forest City ceo Ratner and David Walentas of Two Trees Management Corp. have projects in various stages of completion in the pipeline, those new to the borough are bringing their own perspective to their developments. Barbara Paley, a partner in Atlantic Assets, for example, acquired eight contiguous buildings on Atlantic Avenue near Flatbush Avenue in 2006 and plans to fill the eight retail spaces with an eclectic mix of stores and service providers.
"We're taking a very dead block and making it very exciting," Paley said. "We're dressing up the property by building new storefronts and using beautiful colors for the facades. In the back, we're doing a garden."
The stores, which measure between 1,000 and 2,000 square feet, are being leased and will begin to open in the spring. Paley said she's looking for a restaurant, cafe, spa and beauty concept and apparel tenants. Completed leases were executed at a rate of $70 a square foot, but Paley anticipates that new leases will be in the $100- to $125-a-square-foot range.
She discovered the area several years ago after being invited to join the board of the Brooklyn Philharmonic Orchestra.
"My concept of Brooklyn was that there were these two bridges with a lot of streets in between that I couldn't navigate," she said. "Our site is one block from the Brooklyn Academy of Music and half a mile from the Brooklyn Museum of Art. We're near a transportation hub that's utilized by 43 million people a year. The demographics of Brooklyn are phenomenal, but retailers have been very slow to come over the bridge to Brooklyn."
Other Brooklyn neighborhoods have not been overlooked. Developers in Williamsburg have filed plans for almost 1,900 new condo units since 2004. "There's so much vibrancy in Williamsburg," Rosenberg said. "That's where you see more of the fashion dynamic. Williamsburg has a sophisticated, hip feel to it, a lot like SoHo.""Williamsburg is becoming a focal point," Rubackin said. "It's really Bedford Avenue. The problem is it's difficult to put big blocks of space together. The area is fairly well built up. Fashion companies such as Gap and Zara are looking for space. They're looking to attract the 20- and 30-year-olds."
Robin Abrams, executive vice president at Lansco Corp., noted that new boutique hotels such as Le Jolie in Williamsburg are a sure sign of gentrification. "On every block a new high-rise is going up," she said. "We want to be careful not to overbuild and lose the flavor of Williamsburg and lose the appeal."
Abrams said she knew something was happening in Brooklyn when her 15-year-old daughter told her she wanted to go shopping in the borough. "She wanted to shop on Smith Street and Atlantic Avenue," Abrams said. "I thought, where is she hearing about this?"
Lucky Brand Jeans in July opened a store on Smith Street where American Apparel, Brooklyn Industries and Starbucks have already taken root. Mixed in among the national chains are local fashion designers, independent shops such as Omala, which sells yoga and active apparel and accessories, and restaurants. It's not yet as gentrified as the Park Slope section off Prospect Park, but it's already being compared with the West Village in Manhattan.
"It's still not densely co-tenanted with upscale users," Abrams said. "It's still new and it's still going to be a while before you get [a critical mass] of national and international retailers."
The area may be a choice for firms that looked for space in NoLIta or the Meatpacking District in Manhattan, but were put off by rents of $300 to $400 a square foot. By contrast, listings in the neighborhood include a 6,000-square-foot space on Smith Street for $30 a square foot, a 1,000-square-foot shop on Smith Street near the Fulton Street Mall for $100 a square foot and an 825-square-foot unit on Bedford and Sixth Streets for $175 a square foot. "Things in that neighborhood started at $30 to $40 a square foot and as it gentrified, prices got up to $50 to $100 a square foot," Abrams said.The future of one famed neighborhood remains uncertain. "The big question is Coney Island," Rubackin said. "I can't tell you how retail would do there. A lot of movie theater chains would like to put a unit there because there's a lack of theaters in Brooklyn. Restaurants will follow but the question is whether mainstream retailers such as apparel chains will locate there."
One reason for the uncertainty is the standoff between Thor Equities chairman Sitt and New York Mayor Michael Bloomberg. Sitt has spent the past few years buying up properties for a total of about 80 percent of the amusement area. Sitt, who founded the Ashley Stewart clothing store chain when he was 26, and has bought and renovated inner-city shopping centers around the country, has said his dream is to return Coney Island to its former glory. But Sitt's plan to bolster the entertainment facet of Coney Island with retail and residential components didn't get City Hall backing. Bloomberg this month announced a plan to redevelop Coney Island into the country's biggest amusement park and included a strategy for divesting Sitt of his Coney Island holdings.
Not far from Coney Island, the Gravesend community, where the population is primarily Sephardic Jews and well-to-do Russian immigrants, is an example of thriving retail.
"You can drive around Brooklyn and see one or two block pockets with a couple of high-end stores,'' Rosenberg said. "This community is well aware of high-fashion brands." A recent addition to the neighborhood is Steev West Fourth, an upscale specialty store offering Proenza Schouler, Ports 1961 and 3.1 Phillip Lim, among other designers.
"Our idea was to bring Madison Avenue to Brooklyn," said Elliot Betesh, who bankrolled the store.
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