Eye On Real Estate
By Lore Croghan
Brooklyn Daily Eagle
What's next for Fulton Mall, which has reigned for a century and a half as a preeminent Brooklyn retail corridor?
We were pondering this question the other day because of the recent opening of a 125,000-square-foot Target store at Washington Square Partners and Acadia Realty Trust's mega-project City Point, which is shaping up as a new retail anchor for Fulton Mall.
Target joined recently opened discount designer store Century 21 and drink-and-dine-during-the-movie Alamo Drafthouse Cinema at Downtown Brooklyn's 1.9 million-square-foot City Point.
This spring, a food hall is set to open at City Point that will house entrepreneurs with an array of offerings from Colombian arepas to Japanese rice crȇpes.
The new arrivals are contributing to the latest transformation of storied Fulton Street — where once upon a time, Brooklynites dressed up in their finest outfits to shop at fancy department stores such as Abraham & Straus. It had an art gallery, a beauty parlor and uniformed elevator operators.
Other important department stores, back in the day, included Martin's, Mays and A.I. Namm & Son. According to a 1968 New York Times story, Martin's did more bridal business than any other store in America.
'Epicenter' of Brooklyn retail
We asked a commercial real estate broker with a long track record in Brooklyn for his thoughts about where the Fulton Mall has been, and where it's headed.
“At one time, it was the epicenter of retail in Brooklyn. And to some extent, it was the only retail,” Timothy King, managing partner of CPEX Real Estate, said during an interview at his Downtown Brooklyn office.
After World War II, Fulton Street's primacy was challenged by suburban-style malls like Kings Plaza Shopping Center, he said.
In the 1970s, when hard times hit the retail corridor, it was recast as the Fulton Mall. Merchants in the Fulton Mall Improvement Association banded together to combat street crime and store vacancies.
In the 1990s, high-volume electronics and jewelry stores brought prosperity to the retail corridor, which runs from Adams Street to Flatbush Avenue.
In recent years, credit-worthy national and international retail chains have begun bringing a new flavor to the Fulton Mall.
For instance, in the landmarked Offerman Building at 505 Fulton St., which Albert Laboz's United American Land has been renovating, and adjacent 497-501 Fulton St., new arrivals since 2013 have included Swedish powerhouse retailer H&M, Old Navy and big-name discount retailers T.J. Maxx and Nordstrom Rack.
A massive renovation and remodeling project is ongoing at Macy's, which has a major presence on Fulton Mall.
Retail rents of $250 to $299 per square foot
Along with big-name tenants, higher retail rents have arrived on Fulton Mall.
According to the CPEX Real Estate 2017 Brooklyn Retail Report, they've risen 57% in the past decade to $250 to $299 per square foot from $150 to $199 per square foot.
The strength of the Fulton Mall market is such that it's one of a handful of spots in Brooklyn where lower-level and second-floor retail spaces are in demand, King said. The rent for second-floor sites can be $125 per square foot, depending on various factors.
CPEX's retail team has a listing for second-floor space at 425 Fulton St.
In its “next evolution,” King predicted, Fulton Mall will become part of a multi-street retail area, with Fulton Mall as its central focus, bracketed by Court Street and Flatbush Avenue, and Livingston Street and Willoughby Street.
“This is the crown jewel,” King said of Fulton Mall, “and no-less-bright lights are popping up around it. All of them benefit from each other. Retailers like the synergy.”
He added, “They don't hurt each other. They feed off each other.”
Twenty-five years ago, potential shoppers came to Fulton Street because of Downtown Brooklyn's central business district and courts.
But since then, the Metro Tech office complex was built, and institutions of higher learning moved into the area. And depending on your arithmetic, 12,000 to 15,000 new apartments have been built in a 10-block radius, he said.
Also, numerous hotels have been built.
So today, Fulton Street shoppers are a combination of local residents, transients heading in and out of the courts, college students and tourists, King said.
Increased foot traffic because of City Point
How will City Point impact Fulton Mall businesses? we wondered.
“The impact will be increased foot traffic, which almost every retailer rejoices in,” King said.
But, he said, “the jury is still out” about whether or not “category killer” Century 21 will hurt other Fulton Mall apparel retailers.
Shrewd shopkeepers who offer something unique in their stores will benefit from Century 21's presence, he predicted.
“Smart retailers can make a very good living in a symbiotic relationship with 800-pound gorilla retailers,” he said.
Michael Jordan's store and other recent arrivals
We've noticed that in addition to City Point tenants, other new arrivals have appeared on Fulton Mall.
* Flight 23 at Footaction opened on Feb. 3 at 468 Fulton St. This is the first-ever standalone store for basketball great Michael Jordan's shoe and clothing brand.
The previous tenant was a U.S. Polo Association store. The building belongs to an LLC with Raymond Betesh as managing member, city Buildings Department filings indicate.
* Ann Taylor Factory Store opened recently at 447 Fulton St., which is on the corner of Jay Street. According to The Real Deal, the asking rent had been $375 per square foot. City Finance Department records indicate that United American Land bought this building through an LLC for $12 million in 2005.
* Panda Express has built a restaurant at 423 Fulton St., which is on the corner of Pearl Street. The building belongs to an LLC with Ralph Braha as authorized signatory, Finance Department records indicate.