Cities are forcing landlords to rent vacant retail space
The All American pastime, even more than Baseball, is “Shop Till You Drop”. On any given day, millions of Americans were in malls, boutique shops, car dealerships, etc., that is pre-pandemic. Now shopping has been reduced to Amazon, EBay and online apps like Thread-up or Let Go. But since the start of the pandemic, empty storefronts across the U.S. have been cropping up more and more in places that go far beyond the “retail apocalypse” that battered malls in the earlier part of the decade. And many municipalities are fed up.
From New York’s trendiest neighborhoods to shopping meccas like Washington, DC’s famed Georgetown, vacancy signs are becoming more common than sale signs.
Local governments, wary of landlords who choose to keep their properties empty, sometimes for months and/or years in the hopes of landing a deep-pocketed tenant, are now responding by exacting financial penalties against those proprietors. In some cities around the country, city councils are introducing measures to require landlords to register with the city and charge them $400+ monthly for each vacant storefront.
It’s all coming to a head as residents, in and around these trendy neighborhoods, are fed–up with vacant or boarded-up shops fronts, where coffee shops, restaurants, and high-end boutiques used to be. Residents are angry with landlords who are seemingly letting the neighborhood run down rather than renting to viable independent tenants.
Retail vacancies in Manhattan’s West Village neighborhood were up to 11.3% in June and some parts of SoHo have even hit 20%. In Boston, vacancy rates on the city’s high street of shopping, Newbury Street, were around 10% at the end of 2017. A retail vacancy rate of 5% is generally accepted as the industry standard for a healthy market, according to brokers.
So in order to get ahead of the curve, BHI Construction & Real Estate Development is developing partnerships with larger developers to curb the vacancy trend, by creating market-driven solutions, such as:
Pop-up retail stores
Pop Up Restaurants
Shared retail spaces
Shared office space (built to comply with today’s social distancing regulations)
Creating municipal use projects like child care facilities or libraries
BHI is working with Developers to fill those empty spaces for a better long-term solution for the community.
Even retail giants such as Nordstrom and NIKE have moved to a smaller more personalized and intimate shopping experience. Examples of turning vacant retail exists with new models such as dedicated online business such as Warby Parker and Amazon moving to create a better consumer experience by creating their own pop-up retail shops. The stores bring together digital elements for a personalized physical shopping experience for its consumers.
People have so many choices now, you have to have a reason to get people inside the stores…there are certain things you can’t do/buy online. You can’t buy an experience. You can’t go to Disneyland online.”
There, will always be a need for retail space, let us help you figure out the best experience for your brand and your customers.