The Fulton Street Mall in Downtown Brooklyn has been changing rapidly in recent years, as national retail chains flock to the mall, a shopping strip that once housed local sneaker stores and jewelry repair shops.
The latest retailer to sign a lease is the furniture chain Raymour & Flanigan, which will occupy 28,000 square feet on the second floor at 490 Fulton Street. The store is scheduled to open in February. The discount department store chain Century 21 and H&M and T. J. Maxx also plan to open stores. Other national chains, including Gap, Áeropostale and Express, have opened stores along the mostly pedestrian mall, which stretches 17 blocks from Boerum Place to Flatbush Avenue.
“This will be the largest furniture store in Downtown Brooklyn,” said Scott Milnamow, a senior vice president of real estate development at Raymour & Flanigan. “We looked at a number of different neighborhoods, but we felt like the other national retailers are going to Fulton Street, and we wanted to be a part of that tenant mix.”
Other companies that are considering leasing property on Fulton Street Mall include Armani Exchange, Victoria’s Secret and Nordstrom Rack, brokers who have shown them spaces said.
“I’ve been doing deals on this street for 20 years, and only recently are we starting to see a real shift toward national retailers,” said Barry Fishbach, an executive vice president at RKF.
Spurring the change on Fulton Street is a growing student population, thousands of new residential units, millions of dollars in infrastructure spending by the city and several new hotels. The Downtown Brooklyn Partnership says Downtown Brooklyn houses 11 colleges, and hosts 100,000 office workers and 150,000 shoppers daily. In the last six years, 5,200 apartments have been built and four new hotels have opened with a total of more than 1,000 rooms.
The number of college students in the area has grown to 57,000 from 35,000 in the last five years, according to the Downtown Brooklyn Partnership. The influx of students is having a major impact on the retail environment, said Jerry M. Hultin, president of the Polytechnic Institute of New York University, which has had a campus in Downtown Brooklyn for 155 years. Students typically spend $21,000 annually on food, clothing and extracurricular activity, and “that equates to $1.2 billion a year, which is a lot of buying power.”
Retail rents on Fulton Street are reflecting the increase in demand, said Hymie Dweck, an associate director at Newmark Grubb Knight Frank Retail. “Rents on Fulton Street were always around $150 to $200 a foot, but they are pushing past that now,” said Mr. Dweck, who is marketing a 18,000-square-foot retail space at 519 Fulton Street. Rent at the site is $240 a square foot, which includes real estate taxes.
At 505 Fulton Street, United American Land is redeveloping the landmark Beaux-Arts building that once housed Martin’s department store. It is also building an adjacent structure at 497 Fulton Street. The wall that separates the buildings will be removed on the second floor to connect them.
The developer has signed a lease with T. J. Maxx for 25,000 square feet and H&M for 30,000 square feet, and the stores plan to open next year, said Albert Laboz, a principal at the company and the chairman of the Fulton Street Mall Business Improvement District. It is also close to signing a 45,000 square foot lease with a major apparel retailer and is in talks with an institution to lease 150,000 square feet on the upper floors at 505 Fulton Street, said Mr. Laboz, who declined to elaborate because the deals had not been signed.
Another major development is City Point, a retail, commercial and residential project that will occupy 1.6 million square feet when completed in 2018.
Century 21 will anchor the development with a 125,000-square-foot store scheduled to open in 2015. It will be the first department store to open in Downtown Brooklyn in 50 years, the Downtown Brooklyn Partnership said. When Washington Square Partners and Acadia Realty Trust bought the City Point site, which was the former Albee Square Mall, in 2007, it seemed like a risky bet. “It was hard back then to talk to retailers,” said Paul Travis, managing partner at Washington Square Partners. “They understood what we were saying, but they couldn’t envision it. Now, it is a totally different conversation than it was five years ago.”
The first phase of the project, One Dekalb Avenue, is set to open in November. Century 21 will eventually occupy part of the ground floor, as well as the second and third floors. An Armani Exchange is also reportedly close to signing a lease for the remainder of the ground floor. The fourth floor of the building will be office space. “We are anticipating signing a lease with a technology company and are currently talking with several such firms,” Mr. Travis said. He declined to comment on a possible lease with Armani Exchange and said there were no signed leases in the building, except for Century 21.
Not all of the new tenants coming to the Fulton Street Mall are focused on fashion. A number of restaurants are opening, clustered around the Shake Shack chain at 409 Fulton Street. Panera Bread recently opened at 345 Adams Street, and in the same building, the landlord Muss Development has signed leases with Sugar & Plumm, American BBQ and Beer Co. and a Potbelly Sandwich Shop. The developer wants to lease an additional 1,000 square feet to another food shop.
Other changes include a new retail development at the nearby Municipal Building at 210 Joralemon Street. Led by United American Land, it will create 39,500 square feet of retail space, including a restaurant and a 6,700-square-foot Sephora, the beauty products store.
The transformation of the Fulton Street “will create a continuous retail network in Downtown Brooklyn,” said Thomas S. Conoscenti, the executive director of planning and administration at the Downtown Brooklyn Partnership. “For a very long time, retail in the neighborhood was very fragmented, but there will now be a connection of all the retail corridors creating a unified pedestrian shopping experience.”
But such changes do not occur without tension. Some civic groups and residents worry that lower-income shoppers who have frequented Fulton Street will be displaced as higher-priced chain stores replace local retailers.
Yet brokers, developers and politicians say the retail strip is actually returning to its original character. “In the late 1950s and early 1960s, Fulton Street was a retail environment for people of low income, people of middle income and people of high income,” said Marty Markowitz, the Brooklyn borough president. “Then, over the last many years, Fulton Street no longer offered a shopping environment that represented Brooklyn’s diversity. Finally, we are going back to the future, if you will, going back to what Fulton Street used to be.”
Mr. Travis said, “the perception for many years in retail was that you either had to be a mass market shopping street, or very high end, but you couldn’t cut across these boundaries.”
That is now changing, Mr. Laboz said, “and the challenge is to retain core customers who shop on Fulton Street while embracing the new demographics coming to the neighborhood.”
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Armani Exchange will open a store in November at this recently-completed City Point building, One DeKalb Ave. on the Fulton Mall at Albee Square.
