Grocer Whole Foods, discount clothing store Marshalls and craft retailer Michaels inked the largest leases in the Brooklyn neighborhoods closest to Manhattan last year, a review by The Real Deal found.
From left: Chase Welles, Esther Bukai and Barry Fishbach
The largest deal of 2014 was Whole Foods’ 42,000-square-foot lease at 242 Bedford Avenue, at North 4th Street in Williamsburg. The building is owned by Aurora Capital Associates, Alex Adjmi and Midtown Equities.
TRD reviewed databases and queried brokers and landlords to compile the list, which only included neighborhoods from Gowanus to Greenpoint. The largest deal borough-wide was reportedly Bed, Bath and Beyond taking 100,000 square feet in Sunset Park.
Nearly all the large leases on the list were executed by national or global chain stores. That trend was unsuprising, said SCG Retail’s Chase Welles.
“Unfortunately the indigenous retailer in Brooklyn or pretty much anywhere is not the 40,000 square foot user,” Welles said. “These [big-box] retailers grew to 40,000 square feet, and now they have the financial muscle to build the large spaces and take the balance sheet risk.”
But these large deals don’t tell the whole story in the borough, he added.
In neighborhoods like Williamsburg, Dumbo and Brooklyn Heights, smaller stores are getting creative to attract shoppers.
“That is the part of retailing in Brooklyn that is exciting, what makes storefront retail great and relevant,” Welles said.
Marshalls took 27,000 square feet at 66 Boerum Place in Downtown Brooklyn for the second-largest deal, followed by Michaels taking 26,407 square feet at Renaissance Realty Group’s new development at 252 Atlantic Avenue at the corner of Boerum Place, in Cobble Hill.
Rounding out the top five were discount apparel chain TJ Maxx taking 23,175 square feet at United American Land’s Downtown Brooklyn location at 505 Fulton Street, and Apple taking 20,000 square feet at RedSky Capital and Waterbridge Capital’s 247 Bedford Street, at North 4th Street in Williamsburg.
The Aurora Capital, Adjmi and Midtown Equities ventures had the most deals in the top 10, with three. The retail-focused brokerage Ripco Real Estate represented clients on the most deals, with four. Crown Retail Services, Winick Realty Group and Cushman & Wakefield each had brokers on two deals.
Brooklyn’s retail sector is in part being driven by larger cultural developments, said Jared Epstein, a vice president at Aurora.
“Brooklyn had intense buzz following the success of countless residential developments, the success of HBO’s program ‘Girls’ which is based in Brooklyn, and the use of the Brooklyn name by several brands hoping to leverage the name to boost interest and/or sales of their products,” Epstein said.