The Q at Parkside

(for those for whom the Parkside Q is their hometrain)

News and Nonsense from the Brooklyn neighborhood of Lefferts and environs, or more specifically a neighborhood once known as Melrose Park. Sometimes called Lefferts Gardens. Or Prospect-Lefferts Gardens. Or PLG. Or North Flatbush. Or Caledonia (west of Ocean). Or West Pigtown. Across From Park Slope. Under Crown Heights. Near Drummer's Grove. The Side of the Park With the McDonalds. Jackie Robinson Town. Home of Lefferts Manor. West Wingate. Near Kings County Hospital. Or if you're coming from the airport in taxi, maybe just Flatbush is best.

Friday, April 21, 2017

The Wacky World of Brooklyn Retail Rents

I'll begin with an actual quote from an actual article on The Brooklyn Owl, soon to open on the Upper Flabenue near the Nets Arena (I refuse to say Barclay's anymore - get your damn bank's name on the friggin' subway map for chrisakes, for how much a year? There ought to be a law...). And no, this is not another April Fool's Day joke. The article's dated the 21st.
"It’s not just the normal gift shop with a million different brands," said Annie Bruce. "We’re really trying to give the customers a unicorn experience to make them feel special when they come into the shop." Upon entering the store, shoppers will be greeted with a list of instructions to help guide them through the transformation "from human being to unicorn being," Cory Bruce said. The metamorphosis concludes with a magic mirror that lights up and talks to shoppers, congratulating them on completing the journey.
Now that that's out of the way...

The Q has obtained documents that confirm the hearsay - retail rents and lease-terms and non-renewals along Flatbush Avenue are undergoing an absolutely dizzying change. Building after building is either denying new leases to tenants, for various given reasons, or applying 50% or more increases in cost. You know, I thought this sort of thing was the case a few years ago, but that was when there was just hint of gentrification in the air. (Now that hint in the air is more akin to the stench of the fancy perfume on the wealthy dowager sitting next to me last night at a schmancy benefit for the LGBT Center where Lana Wachowski, Marc Jacobs AND Hillary Clinton all spoke. Lana's was the most fun speech, all Matrixy and stuff, though Hilary did receive a tearful standing ovation and reminded everyone why she was so ridiculously more qualified to affix the Presidential Seal, and most specifically not to embarrass 2/3 of the nation every goddam day.)

It seemed every few months for the past couple decades there'd be rumblings of wholesale change about the Flabenue, or Rogers or Nostrand or SoFro (South Franklin, forget I said it, just messin' with ya) or Church Avenue and on and on. But we really haven't seen the crazy kind of flippage that happened to NoFro (North Franklin, forget I said that, just messin' with ya). Bizzes have come and gone, sure, but the general make-up of the area has remained roughly the same. Lots of busy hair and nail places, a couple coffee shops and bars, discount stores and bodegas and green grocers, then a toy store here a specialty foods store there, couple new hardware stores and a place to fix your i-Crap. Cell Phoneries. A wine shop. Another wine shop. Another wine shop. Another wine shop. A record store. Sure there are more middle-class or yuppie amenities than there were a few years ago, but the mix has simply diversified in drips and drabs, and that slowish pace has been reassuring to some of us old-farts who don't want our beloved 'hood to change TOO much. We are, after all, old-farts, and that means we like our change to come in bits and bobs, the better to assimilate it into our age-addled brains.  (The advent of the internet, for instance. Slowly you go from AltaVista to Yahoo to Google, downloading your first mp3 to streaming to podcasts to unrelenting constant connection to the world wide web, soul-crushing addiction to useless information, browser reloads, pointless games and vapid emails, posts and tweets. It took almost 25 years for my very existence to be usurped into the Wachowski Matrix, my intellect devolved to the desperate act of blogging, a cry for help if ever there was one, trapped behind a Keyboardian Hell of my own making. Help. Help.)

But the rumble's become a roar. When Nelson's and the Notary/Driving School at Flatbush/Parkside get booted just for being. When the beloved Maverick Comic Book store is up for rent (tis true). When three businesses get warehoused together at the corner of Rutland/Flatbush, awaiting god knows what to put in an offer. When brokers now routinely seek $60/sf and up in annual rent, and will WAIT until they get it, when longtime local bizzes are offered only short-term leases or none at all, when shops that don't fit the right "profile" don't make the cut, you know you're entering the Wacky World of Brooklyn Retail Rents. Storefronts are priced by the square footage - it's up to the business owner to determine what qualifies as the right combination of size, shape, price and location-location-location.

From the most recent REBNY report, comes some startling statistics (below): Use the $60/ sf mark to gauge where WE'RE now at, and you'll see that while we haven't reached Park Slope terrain, we're gaining. We're almost up to prime 5th Ave Park Slope, which took a dive to $80ish. Just 10 years ago you could expect to find a place in our neighborhood for $25/sf and a longterm lease, easy. If you struggle figuring how much the monthly rate is on a joint, I like to think of a typical 800 s/f store at $60 s/f is about $5K a month. The math is simple but daunting. Make that much (net after sales) just to break even. And that's on the LOW end of the spectrum in big bad BK. You'll need to clear $20 to $25 K each month in the toniest nabes. Just feast your eyes on these puppies:

  • Franklin Street between Meserole Avenue and Commercial Street in Greenpoint saw the highest increase in asking rent at 41% or $89/square foot compared to Winter 2016, while 7th Avenue in Park Slope came in second with a 35% increase at $129/square foot.
  • 86th Street between 4th Avenue and Fort Hamilton Pkwy in Bay Ridge came in third with a 29% increase at $110/square foot for ground floor retail space versus $85 from last year.
  • Washington Street between Main and Water Streets in DUMBO saw a 13% rise in asking rents at $127/square foot while the Fulton Street corridor between Boerum Place and Flatbush Avenue saw an 8% rise with a whopping asking rent of $326/square foot.
  • The Report states the increase on Fulton Street can be attributed to the seemingly endless numbers of residential towers being developed in the area as well as to new retailers hoping to attract “spillover” customers from City Point.\
  • Brooklyn Heights’ Montague Street spanning Hicks Street to Cadman Plaza, and Prospect Heights’ Flatbush Avenue from 5th Avenue to Grand Army Plaza both remained the same since Winter 2016, with asking rents at $188/square foot and $102/square foot, respectively.
  • The Report notes that the Flatbush Avenue corridor has remained the same since REBNY began compiling these reports in Summer 2015, however they see the strip’s potential to increase significantly with the Pacific Park residential project in the works.
  • Over in Cobble Hill, Court Street between Atlantic Avenue and Carroll Street experienced a -14% drop to $151/square foot whereas asking rents along this corridor were $175 in Winter 2016. Smith Street between the same borders also saw a decline of -12% down to $122 versus $139 in Winter 2016.
  • According to the Report, leasing on Court Street has slowed due to competition from the adjacent Smith Street which offers lower asking prices for ground floor retail spaces.
  • Park Slope’s 5th Avenue between Union to 9th Street also saw a decrease of -8% down to $78/square foot as opposed to $85/square foot from Winter 2016. Hopefully these lower asking prices will help to fill up the many empty storefronts currently lining 5th Avenue.


Jacob said...

I was struck by this:

Santander Bank signed a 10 year lease at $100/sq ft for space next to Erasmus High. According to common wisdom, this would be the less gentrified part of Flatbush, with cheaper rents.
But here's the paradox. The area is so bustling, even more so than Flatbush between Parkside and Empire, that businesses like this bank, Staples, and the Gap are paying a premium for storefront space. That means that new businesses looking for a startup space, like coffee shops, restaurants, gourmet bakeries, etc, are going to get squeezed from both sides. They can't afford PLG's Flatbush stretch because of gentrification, and they can't afford Church to King's Plaza because it is such an in-demand business district. No wonder places are popping up on Rogers.

Mags PLG said...

Tim, as your post was largely about changes on Flatbush, I wanted to suggest some positive action we can take as a community to improve our little stretch of commerce. Every morning as I walk to the Prospect Park stop I encounter copious amounts of trash strewn about. Much of the detritus has been jettisoned by people so lazy and churlish that they won't walk 5 feet to the nearest receptacle. That being said, by nightfall when the most egregious litterers emerge many bins are full eliminating the last remaining compunction toward civility. But there is hope! NYC'a "Adopt a Basket" program provides willing shop owners with green plastic bags with which to line the baskets. They are responsible for tying them up and replacing them with a fresh bag before the bins overflow. The full bag is placed next to the bin to be picked up by our stalwart sanitation engineers. I might suggest that the Parkside Empire folks spearhead an effort to enourage Flatbush merchants to participate.

And that's one to grow on, and I'm Ricky Schroeder

Anonymous said...

Wow, what a great suggestion! I've written so many times to the Mayor's Office, Borough President's Office as well as the esteem Mathieu Eugene about the extensive amount of garbage on the avenue; to no avail. The idea of having these businesses invest on the avenue by adopting a basket and support the environment where they do business is fantastic.
Q, would the Parkside Empire/Flatbush Avenue Merchant Association support this initiative? I think they really should spearhead this, as it will make Flatbush avenue become more attractive; increase foot traffic and therefore increase sale.
Your thoughts?

diak said...

Oh, Mags PLG, if only... In my experience many of our local business owners are just as "lazy and churlish" as their customers. They are motivated only to do the bare minumum to avoid a ticket from the Dept of Sanitation which is to keep the sidewalk in front of their establishment garbage-free. (At least until the DoS enforcement officer goes by.) Many is the time I've seen someone sweeping up on Flatbush—that is, sweeping the garbage off the sidewalk into the street or if the adjacent storefront is vacant, over the property line so it becomes somebody else's problem.

The proliferation of empty stores (I knew this would connect to the original post eventually!) only makes the situation worse. Seems to me that the landlords should be responsible for keeping the sidewalks in front of their vacant properties clear of trash and snow. But don't hold your breath. (Advisable, however, to hold your nose...)

MikeF said...

Next up, can we discuss the economics in play that often make a 12 oz can of soda more expensive than a 2 liter one?

Unknown said...

Take it from someone actively looking to open a business in the neighborhood simply TERRIFIED by the increase in space rents and altered nature of the rental market. We're dizzy with confusion and fright.

no_slappz said...

The realities of soaring rents are also leading to the other reality -- the rise and rise of Amazon and the others who take the shop out of shopping. But then there are those banks. They open branches at prominent sites and crowd out other businesses. Something tells me banks are replacing check-cashing centers. Or, at least emerging more often. That's a sign.

Gold Coast Bank opened its first Brooklyn branch a couple of weeks ago. In Ft Greene on Myrtle Ave. A Long Island bank that leans toward serving businesses. A little beneath the surface, it's the Bank of Catsimatidis. During the hours of the opening festivities something occurred across the street in the Ingersoll Houses. Gravity made an arrest.

Myrtle. It's a Maginot Line of sorts. Prosperity is gaining.

Anonymous said...

(Now that hint in the air is more akin to the stench of the fancy perfume on the wealthy dowager sitting next to me last night at a schmancy benefit for the LGBT Center where Lana Wachowski, Marc Jacobs AND Hillary Clinton all spoke. Lana's was the most fun speech, all Matrixy and stuff, though Hilary did receive a tearful standing ovation and reminded everyone why she was so ridiculously more qualified to affix the Presidential Seal, and most specifically not to embarrass 2/3 of the nation every goddam day.)

Nothing says "it's over" quite like Hilary's mourners at this event. She oughta take General MacArthur's advice on fading away.

Bob Marvin said...

LOL Anon. 8:38 AM; MacArthur was also known for saying "I shall return" and "I have returned" and his "old solders never die, they just fade away" line was basically sour grapes when Truman asserted his authority overt the military.

Clarkson FlatBed said...

I think it's hard for people to grasp just how beloved she is among her core supporters (she did win the vote by 3 million too). She was never able to show that effectively, and Bernie kinda stole her thunder. Not that he wasn't entitled to of course - but she never regained her footing after the Primary battle.

Anyhow she ain't going nowhere. Far from being humiliated (though that lasted a couple months said she) she's a fighter and responds well to positive feedback, of which there will be plenty from LGBTQ, women generally...she won't be the nominee but she will be very much a part of politics til the day she dies. She also believes (true or not) that the election was stolen by a combination of lies (from the Trump side, that continue to this day), misogyny, The Russians, Comey and the Republicans who tried for years to put her behind bars. She'll have a last laugh, if history is a guide.

I love it when the haters want people to disappear. It doesn't work like that in the real world, especially one where you've been in the spotlight for most of your adult life.

Anonymous said...

Have you heard what is going in at the old Maxmillon Bells spot on Nostrand?

Jacob said...

I live on Martense near Rogers. From our perspective, fears of rampant gentrification are a bit overblown.

In the past 3 years, the following businesses have opened in basically a 1 block radius:

Caribbean Restaurant
Security Guard Training
Thrift Store
Pizza (not the yuppie kind)
Burger King
Independent Pharmacy
Cake store (not the yuppie kind)
Medical Supply Store
Kitchen supply store

and then finally, a few weeks ago, a single coffee shop, the first one between here and Hawthorne, 10 minutes to the north.

Perhaps people struggling to open their dream business should be looking further south than Parkside and further east than Flatbush? or are the rents here just as high?