The market for retail properties in Brooklyn has been showing some growth this year, which is attracting a number of local property investors. Yet in some corridors, rent prices are softening, which could potentially mean downward pressure on the retail property market. So how should commercial real estate investors approach retail space in Brooklyn?
Established Areas Get Less Traction
Quite a few of Brooklyn’s neighborhoods – the ones previously targeted by investors as “prime locations” – are seeing rent soften in the retail market. Neighborhoods that are already established with housing and retail spaces are seeing a decline in rent rates. This is not an unusual situation. As places become developed and level off, businesses that occupy retail space in Brooklyn become settled. The revenue from the businesses can justify the rent paid, but an increase to the rate could force the businesses to leave, which would place a temporary halt on revenue for property owners until new tenants moved into the property. Fear of disruption to all parties involved is one of the major causes of softening rent rates.
Up and Coming Neighborhoods
While rents for retail space in Brooklyn have plateaued for some neighborhoods, the ones that are currently undergoing major development are seeing rent on the rise. The much-touted Opportunity Zones are playing a big part in this, but so are new luxury apartment complexes, which are attracting businesses to provide convenient access to goods. The key to all of this is timing because if commercial real estate investors want to boost revenue now, then lining up retail space in Brooklyn presents a good opportunity. Just keep in mind that as these neighborhoods become developed and level out, that rent rates will likely follow suit.
Financing Retail Space in Brooklyn
Financing retail space in Brooklyn right now is also not a clear picture. Banks and other traditional lending channels are treating commercial real estate in Brooklyn as a high-risk investment. As such, they are raising their requirements to access funding and perform very thorough checks which often result in delays and missed opportunities. Private lenders who understand the Brooklyn property markets see the potential benefit to investors, and are processing loan requests quickly for everything from acquisitions to renovations, and even new construction.
Express Capital Financing provides funding solutions tailored to the needs of NYC investors. Our organization understands the Brooklyn market and has years of experience successfully financing transactions and projects throughout NYC. Contact Express Capital Financing today to learn more.