What factors are driving the current boom and bust realities of retail real estate in markets across the U.S.? Can you offer solutions for reducing vacancy rates in places such as Manhattan?
Interactive Edge’s CEO, Zel Bianco comments:
I agree with Bob that there are many factors to this dilemma, but greed is certainly the main one here in Manhattan. Many of the landlords here are big and really don’t care if they keep a storefront empty until someone with deep pockets or a tenant that is willing to sign a long-term lease comes along. Can you blame a retailer for not wanting to sign a long lease in these uncertain times?
This trend is not only true in retail space but in office space as well. The co-working trend is alive and mostly well here in NYC because landlords have always been too greedy with what they charge for commercial space, given that they are allowed to charge you for square footage that you cannot possibly use — including the lobby space, the vestibules, the elevator and so on. I had one lease where the landlord added a surcharge to bring electric power from the basement up to our floor. This does not happen in other markets. Garages charge $100 dollars to park your bike for the month.
Until local ordinances are passed that force a landlord to rent space that has been vacant for more than say six months to a year, this will not change. Pop-ups are part of the solution, but more retail experiences that are engaging is what is truly needed but at a price point where a retailer has a fighting chance.
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