Bklyn buyers interest spikes.

Significant changes are under way in Brooklyn that are transforming the retail property market, according to a third-quarter Retail Research Report by Marcus & Millichap Real Estate Investment Services.

Vacancy in retail properties remains in the low-5 percent range, although the rate may rise periodically in the near term as older, local merchants exit the market and new, national chains move in.

"In the investment arena, local buyers continue to sustain an elevated level of activity," says J.D. Parker, regional manager of the Brooklyn office of Marcus & Millichap.

"Storefronts with either a residential or an office component account for more than 80 percent of all properties changing hands, a trend that will endure over the near term, especially in light of strong housing demand."

According to the report, employers in Brooklyn are expected to add 5,700 jobs by year's end, a 1.2 percent gain and an increase from 4,600 new hires in 2006.

Developers are on course to deliver 500,000 square feet of retail space this Vacancy is forecast to end the year at 5.3%.

Average marketwide rents are expected to climb 8 percent this year to $37.80 per square foot, although properties in some emerging retail corridors could post double-digit gains.

The median price of single-tenant, net-leased assets in the borough climbed 10 percent last year to $322 per square foot.