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March 10, 2009

High Rents Killing Montague Street

With a high concentration of wealthy residents and plenty of nearby businesses, Montague Street in Brooklyn Heights should be a vibrant retail strip but it appears to be a victim of its own overinflated sense of self-worth: Eight storefronts on the five-block stretch are now vacant, victims, The Daily News reports, of too-high rents. "The common denominator is high rent," said the Brooklyn Heights Association's Judy Stanton. "Little businesses will come here if they think they can make a profit, but it handicaps itself with the high rent." Recent casualties include Heights Books (which is moving to Smith Street), Blue Rose and Spicy Pickle, which by all accounts wasn't any good anyway. Do you think landlords are going to get a clue?
Montague Street Hitting the Wall [NY Daily News]
Photo by tosca2002

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no I doubt it. Some other fool will come along.
This is pretty old story for Montague St. Been great turnover for decades.

Posted by: Petebklyn at March 10, 2009 9:12 AM

No, the neighborhood has a sense of self importance, the residents and the owners of the store fronts. Maybe they will understand that vacant store, like vacant houses in "bad neighborhoods" leads to the demise of a neighborhood not the invigoration.

Posted by: witchdoctor at March 10, 2009 9:17 AM

Those examples are worthless.

Heights Books was told their building would be delivered vacant to the new owners. The building was sold. They have to move. Has nothing to do with rents (rumor is the new owner of the building is putting his own place in the storefront).

Spicy Pickle was horrible and probably would have folded if they paid $2,000 a month.

Blue Rose was an over priced boutique that was out of place. It had a younger vibe, Smith St or Williamsburg kinda thing. Just a bad fit for the shopper in the neighborhood.

I agree rents are crazy on Montague, but those 3 examples are businesses that have left due to circumstances other than high rent.

Posted by: christopher at March 10, 2009 9:22 AM

Every business understands that its biggest expense is the rent. Before they open for business they have done the math. They came to the conclusion that with all the expenses they should be able to make a profit.

They are quick to blame the landlords when the economy has taken a turn for the worst. Its the business model that they follow and the poor economy that has led them to close. The book store mentioned can't possibly expect the landlord to keep the rent the same as it was 10 years ago. Operating expenses for a building went up a great amount since then.

.........before you know it, they will expect the city to regulate commercial rents!

Posted by: landlord at March 10, 2009 9:26 AM

Sounds like a lot of small businesses have made faulty assumptions in their projections for their income model and balance sheet. What else is new??

Posted by: daveinbedstuy at March 10, 2009 9:30 AM

In reality it has always been a landing runway for young business hippies that immigrate here from other places not having a clue about business but having a sturdy shoulder because of mommy and daddy's wallet back home. They open up their new hippie style stores and so what if they pay too much rent and don't make a profit! They have mommy and daddy sending them a check every month. They are so proud of their children. After all they have a business!

Posted by: hannible at March 10, 2009 9:37 AM

I seem to remember reading a thread either here or on Brooklynian that centered on the same situation on 7th Avenue in Park Slope. There was reference in that thread to certain anomalies in NYC tax laws that supposedly make leaving a storefront unoccupied a comparatively minor financial pain to a landlord, thus encouraging him to hold out for a long term lease at a higher rent than would currently appear viable for a retailer. Anyone know whether this is really the case and, if so, the details of this (what would amount to a) commercial landlord subsidy?

Posted by: johnife at March 10, 2009 9:37 AM

About seven or eight years ago, I wandered into a convenience store on Montague Street and experienced a Rip Van Winkle moment. A bar with sidewalk cafe tables had been at that location for many years, and I'd asked the man behind the front counter when it had closed (and when had the convenience store opened).

The man told me that he had been the owner of the bar and that he made the transition about 12 or 15 months beforehand.

He said that the cost of living in the neighborhood had changed. The bar's clientele had moved out of the neighborhood, and a new demographic of people had moved in.

"The area used to be populated by writers and schoolteachers, and they liked to go out on weeknights," he said. (Indeed, I remembered the times that I had met Brooklyn Heights-area friends for a burger there any evening of the week but especially on weeknights.)

"Now, families and lawyers are living around here. They don't really go out. They stay at home."

Montague Street may have something in common with upper Madison Avenue, which also has many newly vacant street-level retail properties.

However, it would be interesting if someone would address the general compatibility of the retailers and the current Brooklyn Heights-area population. Are they a good match, or they ill-suited to one another?

Posted by: starpower at March 10, 2009 9:41 AM

hannible,

"In reality it has always been a landing runway for young business hippies that immigrate here from other places not having a clue about business but having a sturdy shoulder because of mommy and daddy's wallet back home. They open up their new hippie style stores and so what if they pay too much rent and don't make a profit! They have mommy and daddy sending them a check every month. They are so proud of their children. After all they have a business!"

You have OBVIOUSLY never visited Montague Street.

Posted by: Prodigal_Son at March 10, 2009 9:43 AM

starpower, I'm not trying to be snarky here, but I think this is exactly what is happening...the market forces are at work and those businesses which are unsuitable are folding.

Posted by: daveinbedstuy at March 10, 2009 9:46 AM

Hannible only goes where the short bus takes him.

Posted by: SnarkSlope at March 10, 2009 9:49 AM

-> daveinbedstuy

Thanks. Aside from doing errands on Court Street, I've not spent much quality time on Montague Street recently.

Your remarks and those from anyone else who spends a significant amount of time in the area are appreciated.

Posted by: starpower at March 10, 2009 9:51 AM

I like the convenience of shopping on Montague Street and wish more stores would open up. It seems landlords are unrealistic about what kind of tenants will come in. Many of the spaces are small--you're just not going to get a national retailer in there (except maybe a cellphone store-yuk), and real estate brokers aren't in need of more offices right now. So take a chance on some new businesses, please.

Posted by: tinarina at March 10, 2009 9:51 AM

starpower, I think the real issue is the conflicting clientele: the residents I agree are either young families who don't go out at night or long-time residents who don't go out at night. There do not appear to be a large number of young to middle-aged singles in the area. Then you have the very large population of downtown workers who represent the majority of the lunch crowd in the area. This encourages more chain-like stores/restaurants...the Verizon stores, Subway, etc. So we end up with an odd hodgepodge of stores on Montague, none of which appear to be overly successful. I don't know how this will change.

Posted by: Biff Champion at March 10, 2009 9:52 AM

Oh it'll work itself out. The market is very efficient.

***Bid half off peak comps***

Posted by: Brownstones Half Off at March 10, 2009 9:57 AM

"Now, families and lawyers are living around here. They don't really go out. They stay at home."

he meant they don't get home until 9.30pm

Posted by: dittoburg at March 10, 2009 9:57 AM

"n reality it has always been a landing runway for young business hippies that immigrate here from other places not having a clue about business but having a sturdy shoulder because of mommy and daddy's wallet back home. They open up their new hippie style stores and so what if they pay too much rent and don't make a profit! They have mommy and daddy sending them a check every month. They are so proud of their children. After all they have a business!"

Ding ding ding!!! The QOTD!!!!! Great Job!!!

The What (Hippies love skittles)

Someday this war is gonna end...

Posted by: Return of The What at March 10, 2009 9:59 AM

i would absolutely DIE if i didnt get home from work until 930. i dont care if i made a million dollars a year. time is too precious.

*rob*

Posted by: PitbullNYC at March 10, 2009 10:00 AM

Right now there are too many brokerages and cell-phone stores -- I'd expect one or more to fold.

In the last recession, they opened up a 99c store.

Posted by: thwackamole1 at March 10, 2009 10:00 AM

This is a problem???? The LL in question are undoubtedly already lowering their asking rents to get these vacancies rented - its the way pricing works.

Many things in our society are being 'repriced' -

Posted by: fsrg at March 10, 2009 10:00 AM

Tuesday night is 1/2 price wine by the bottle in many Brooklyn restaurants. Go out tonight and support your favorite one. I'll probably go to Jolie.

Posted by: daveinbedstuy at March 10, 2009 10:01 AM

What gives hannible the daily "reach around." Predictable.

Posted by: daveinbedstuy at March 10, 2009 10:11 AM

It always takes a big storm to blow away stagnant air. Sometimes they brew up on the Great Plains, sometimes on Wall St. But down on Montague, they started dealing in trust-fund slaves and something inside of em died.

But seriously folks, what is in the tax code that makes it easy for landlords to warehouse not only storefronts but apartments all over the city? Anybody know? Figure there must be some overgenerous provision that allows Archstone to carry all those absurdly priced empty apartments for months on end.

Posted by: cgwatcher at March 10, 2009 10:12 AM

DIBS - it gives them something to do during the bus ride.

Posted by: SnarkSlope at March 10, 2009 10:19 AM

Montague has never been a "landing runway for young business hippies that immigrate here from other places not having a clue about business but having a sturdy shoulder because of mommy and daddy's wallet back home"

Or at least not in the 30+ years I've lived there.

As a kid it was mostly fast food type stuff. Burger King, Hebrew National, Nick and Joe's pizza (and Randazzo's). College Bakery. Promenade Restaurant. Happy Day's and Grand Canyon. Blimpie's. Baskin Robbins and Haagen Daza. Bars like the Montague Saloon, and more.

Places like Blue Rose and Spicy Pickle thought they could survive on the buzz of the street alone. They couldn't and left. Regardless of rents a bad business will fold before too long.

Posted by: christopher at March 10, 2009 10:29 AM

Montague Street is a convenience street for downtown brooklyn and basic services for heights folks. Not going to be high end because heights people, as they say they do for restos, shop in manhattan for fancy, as do most all of us. while that is evolving, let's face it. further, heights is one of lowest if not lowest 'occupant per unit' areas of bk, so has little population compared to amount of homes rents are coming down and will come down for next 2-4 years, depending on guess what

Posted by: BK realestate veteran at March 10, 2009 10:39 AM

Anything going on with the Blue Pig/Busy Chef locations??? I've had business dealings with the owner. Caveat emptor.

Posted by: daveinbedstuy at March 10, 2009 10:48 AM

Look if the cocorean Real Estate Group resides there what do you think that tell you? I smell high rents and high commisions. Someone has to pay for that and it not going to be me.

Posted by: hannible at March 10, 2009 10:49 AM

I know of nothing in the tax code that makes it advantageous for commercial landlords to leave their places vacant. As the owner of a small storefront, I try to rent it right away when it's vacant. I also try to rent it at a high enough price to cover my mortgage expenses and RE tax, which continues to spike like crazy. I'm forced to try to obtain a monthly rent that I think is above what the market seems willing to bear.

The demand for storefronts isn't huge. When showing the place I had expected to meet dynamic, entrepeneurial folks and I did meet a few. But many of the people looking for spots for their business seem either like they'd have a tough time getting jobs elsewhere or, curiously, had a bipolar vibe. I didn't come across anyone that seemed to be bankrolled by parents.

I lived in the Heights from 1998 to 2003. Although there are multiple large apartment buildings, I think alot of homes are occupied by people who either work all the time or use the place as a second or third home. Montague St. gets alot of traffic from the courts, City workers from downtown Brooklyn, LI College Hospital workers and tourists, not so much from neighborhood residents.

In recent years the conversion of portions of the St. George Hotel to student housing (and maybe some traffic from Dumbo) have done wonders for the stores on Henry St. This past weekend I went to the movie theater there and the street was bustling, not so with Montague.

Posted by: Bessie at March 10, 2009 11:13 AM

i don't understand why a high end restaurant wont work on montague. maybe families and lawyers don't go out on weekday nights.. but they sure do on weekends. 2 saturdays ago i tried walking into jack the horse at 8:30 (90 min, and couldnt even sit at bar to wait), henrys end (hour), and noodle pudding (90 min). ended up going to smith st.

Posted by: Danny Noonan at March 10, 2009 11:17 AM

I worked on Montague for years. The restaurants do brisk lunch business but dinners are very slow. They cater to all the lawyers that work in the area COURTHOUSE.
The neighborhood is very beautiful but also very dry. I do like the comparison to upper Madison avenue.

hannible- Why are you always so grumpy? Did a real estate agent drop a house on your sister?

Posted by: Adam Dahill at March 10, 2009 11:17 AM

who the hell uses the word "hippie" these days?

Posted by: Santa at March 10, 2009 11:17 AM

In all the years I lived over in that area (I lived on Remsen St. for several years before Schermerhorn-Christopher remembers what was there pretty accurately, and there was always turnover.I worked for an antique store that was on Montague- we used to wonder why businesses didn't do so much better. The storeowner said most neighborhood residents worked in Manhattan and shopped there. Biggest business was the lunch crowd from the courts and office buildings, and a rush as workers came back home. Sure enough- between 6 and 7 there would be a small rush, weekends were slow.

I think there's always been a problem with Montague St. not being as commercially successful as it could be. It's more of a convenience for the neighborhood, but not a destination.

Posted by: bxgrl at March 10, 2009 11:21 AM

Christopher, Thanks for writing the note to Hannible that I was about to write. Can't think of any "hippie" businesses ever on Montague St. I lived just off the street for 32 years and the big change was driven by the lunch business. It went from neighborhood services, to lunch time outlets for the courts, Bklyn Union Gas, Banks, etc. This drove the rents up and brought national chains. I picketed the Burger King opening in the 70s.

Posted by: Jebby at March 10, 2009 11:23 AM

We are in our 30s and no kids yet and live a block from Montague street. I think we'd go out during the week way more often if there were places to go. That's why the Tea Lounge thing is particularly exciting. When we have friends over we almost always take them to Jack the Horse or one of the places on Henry in the ruit street area or go up to Smith/Court street. Inevitably such friends ask why don't we go out on Montague b/c it's right there - but most of the places are unappetizing or not suited for just having a drink. The only stores I shop in there are Tango (which is pricey but has all of the jeans and T Shirt basics that I'd otherwise need to hike to SoHo for) and the hardware store.

Posted by: columbiatch at March 10, 2009 11:26 AM

Danny Noonan, great point. I don't understand it either. I tried to go to Noodle Pudding a couple of Fridays ago and could barely squeeze in the door. It was 9pm. Forget about trying to get past the crowd to ask about the wait, there was no way it was happening. Le Petit Marche (ended up there) and Henry's End were also crowded. Don't understand why a similar restaurant doesn't open on Montague.

Posted by: Biff Champion at March 10, 2009 11:28 AM

this is alittle off topic but when I was going to college in raleigh, NC there was a starbucks on the main stretch of businesses across from campus. It went out of business and was replaced by a hookah bar/coffee shop.

best business turnover ever.

Posted by: Santa at March 10, 2009 11:29 AM

BREAKING NEWS SPECIAL REPORT: (sorry for the off topic-ness of this post, but just thought we could all use a bit of less bad news)

Stocks are rising after troubled Citigroup said it operated at a profit during the first two months of the year.

The Citi chief executive Vikram S. Pandit said the bank had an operating profit of $8.3 billion before taxes and special items through February. Word of the bank’s performance is breaking, at least for the moment, a torrent of bad news from the banking industry that has pounded financial stocks and in turn, the overall market.

Meanwhile, the Federal Reserve chairman Ben S. Bernanke is calling for a revamp of the country’s financial regulatory system.

At 11 a.m., the Dow Jones industrial average was up 249 points or 3.9 percent. The Standard & Poor’s 500-stock index rose 4.2 percent, while the Nasdaq composite index was 4.6 percent higher.

Posted by: 11217 at March 10, 2009 11:30 AM

Danny Noonan, There was a fantastic old world restaurant on Montague Street called Foffes (155 I believe). All the judges would have lunch there and Meade Esposito would hold court at a table in the back. They would have a wild game dinner every holiday season that people came from all over NYC to attend. It had great real food, professional union waiters. Think it opened in the 30's and closed in the early 90's. I was heart broken.

Posted by: Jebby at March 10, 2009 11:32 AM

I cannot understand why GAP closed instead of expanding. The idea that a GAP at Atlantic Center was for the same demos is just wrong. GAP (I know, a chain store) is still a good place to pick up basics for both those who work and live in the neighborhood (it always seemsd to be busy no matter how tiny it was) -- and I have to believe that a GAPKids would do very well. The BR store seems to do well, as does the Aerosoles store.

And the only good place to eat/drink are always crowded. No one who lives in the area would ever eat at any place on Montague if you could help it. Those who only work at MT have no idea that there are so many great restaurants -- just not near.

Posted by: BH76 at March 10, 2009 11:51 AM

Jebby,
Foffe's. Ha. Funny that you mention that place.

My dad talks about that place a lot. My uncle took him and his buddies there during my mom's bridal shower back in the early 70s. Apparently it was a high point for my dad and his friends (they were broke recent college grads, my uncle was older and had some money).

The Foffe family still owns the building (the florist is in it). My mom actually grew up with them, classmates with one of the children I believe.

Montague has always been a tough street. Crazy big lunch scene so stores that cater to the business set do well. It's a bit of an after thought street after 6pm as many have mentioned, so more tradition sit down places don't see the same type of rush/clientele. The north Heights has developed nicely into a solid business district.

Posted by: christopher at March 10, 2009 12:00 PM

Brooklyn Heights is filled with curmudgeonly old people who are set in their ways and annoying super high-income families with pretentious teenagers who have lived there for 15+years.
These people shop at Lassen and Hennings and Key Food and that's it. Occasionally they might go out to Noodle Pudding or Henry's End because these are what they are familiar with. Young twenty/thirty somethings either cannot afford to live there or are put off by said old people and a lack of businesses catered to them. The few young people that do live there tend to hang out on Atlantic or Smith St. Montague will never change. The lunch crowd is all people from the courthouse and hipster brats from Packer, so fast food chains it is. No chef or restaurateur with serious aspirations is going to test the waters of Montague St. The only boutique that can survive is Tango because they stock expensive boring clothing that makes the Packer moms feel hip. I lived there for many years because I thought it was the most beautiful neighborhood in NYC, which it probably is. I had had enough by the fifth or sixth incarnation of the corner of cranberry...

Posted by: boofer at March 10, 2009 12:06 PM

> "At 11 a.m., the Dow Jones industrial average was up 249 points or 3.9 percent."

Once again, do we lose that gain tomorrow or Thursday?

Posted by: SnarkSlope at March 10, 2009 12:10 PM

Boofer, The reason Tango survives is that the owner bought the building 25 years ago. Let's not overlook Theresa's which is great and has a diverse clientele.

Posted by: Jebby at March 10, 2009 12:11 PM

Theresa's has great perogies but the last time I ate there the place was filled with octogenarians and I had to sit next to a family who allowed their son to pretend he was some kind of wild cat the entire time and growl and snarl loudly at strangers or them when they tried to get him to eat.

Posted by: boofer at March 10, 2009 12:20 PM

I remember FOffe's! And actually i disagree that there are no good places to eat on Montague. At least, there used to be. I think the problem is not the businesses- its jsut one of those odd interactions of locale and demographics. It's a lovely, charming street but never seems to have carved out a real personality for itself.

Posted by: bxgrl at March 10, 2009 12:23 PM

I'm not a fan of Theresa's either.

Granted I still shed a tear every time I look at the Heights Cafe (which I actually do like) since they took over the Promenade Restaurant. Love Promenade's rice pudding....

For my the Grand Canyon or Happy Day's satisfies my diner needs. Clark's, up Henry St, is great too.

Posted by: christopher at March 10, 2009 12:26 PM

"Once again, do we lose that gain tomorrow or Thursday?"

If Oprah can fall off the horse, anyone can.

Posted by: 11217 at March 10, 2009 12:51 PM

It's more than rent for the small businesses that are forcing many to close all over the country. Insurance only goes up, property taxes if you pay triple NET, sales are going down for most restaurants and retail, and most other small expenses can increase as well. Brooklyn is not immune.

Posted by: Iknow at March 10, 2009 1:24 PM

Eamonn's is about the only place on Montague I go to on a semi-regular basis. I prefer Henry St. Ale House and that strip of businesses has got the vibe I want.

Any excuse to be in the Heights for me, but perhaps I'm the exception.

Posted by: infinitejester at March 10, 2009 1:26 PM

All this talk has me reminiscing...

... who remembers the record store, the Squared Circle I believe it was called? It was on both floors of what is now Jennifer Convertibles and and the vacant space above it.

Bought my first record, tape, and cd there.

How about the OTB? The one story OTB on the lot now occupied by Garden of Eden and the luxury apartments above it. Now that's gentrification.

I could go on....
... the porn theater on Court St next to (give or take) Queen Restaurant.

Good times...

Posted by: christopher at March 10, 2009 1:55 PM

Woo hoo the market is up thanks to Citi group. Captain John get those engines started we are flying to Europe for the week end. Citi workers will get those long awaited bonuses. Real Estate agents lets go to Ikea and buy a piece of furniture for 30 dollars and then tell the sucker buying it that it is a valuble work of art.

Posted by: hannible at March 10, 2009 2:08 PM

"For my the Grand Canyon or Happy Day's satisfies my diner needs. Clark's, up Henry St, is great too."

christopher, I went to Happy Days once and it made Denny's look like Brunch at the Plaza. Ok, maybe not that bad. But Clark's is definitel an excellent breakfast place.

Posted by: Biff Champion at March 10, 2009 2:31 PM

I believe that happy days has received one of the highest amounts of health code violations in the entire city.

Posted by: boofer at March 10, 2009 2:43 PM

Montague street needs a good OTB and comic book store.

Posted by: Xander Crews at March 10, 2009 2:50 PM

i spent the early '00s in BH. fresh out of college so i knew the "bar scene" >

annie's blue moon
montague saloon
park slope brewery
clark street station
emon's

i remember annie's always being the busiest of the bunch.. but the cool kids used to trek down to last exit before smith street became hot.

Posted by: bowl of dicks at March 10, 2009 2:56 PM

"Montague street needs a good OTB and comic book store.

Posted by: Xander Crews at March 10, 2009 2:50 PM"

The OTB is long gone, but the comic book store is still there, alive and strong (and in the storefront that use to be my great-uncle's insurance business).

And Biff,
Happy Days may not be high class, but at 3 am there aren't a lot of options for greasy drunk food on Montague St.

Posted by: christopher at March 10, 2009 3:02 PM

"And Biff,
Happy Days may not be high class, but at 3 am there aren't a lot of options for greasy drunk food on Montague St."

christopher, point taken. Then again, I'm not often out at that hour any more...

Posted by: Biff Champion at March 10, 2009 3:06 PM

umm greasy drunk food in the heights:

park plaza diner > open 24hrs on the weekends, 2am on weeknights

Posted by: bowl of dicks at March 10, 2009 3:12 PM

Biff,
I'm not out at that hour anymore, but I like to think back to the days when it was possible...
...and might be one day again ;)

I am not a fan of the Park Plaza in any way. I'd eat Happy Days sober in the light of day before I'd dine at the Park Plaza. But that's just me...

Posted by: christopher at March 10, 2009 3:22 PM

I tried Park Plaza for the first time a couple of weeks ago and agree it wasn't great. I'm always a bit nervous about the freshness of the ingredients when there are hundreds of items on the memu. The service, however, was very friendly.

Posted by: Biff Champion at March 10, 2009 3:33 PM

"menu" that is...

Posted by: Biff Champion at March 10, 2009 3:34 PM

Agree about Happy Days- it was fun in a real teen kinda way. Grand Canyon was never a favorite- the hamburgers were dry as dust.

Posted by: bxgrl at March 10, 2009 4:01 PM

Park Plaza Diner has the best pancakes - yum yum yum.

Posted by: columbiatch at March 10, 2009 5:19 PM

Adam Dahill I am pissed that our government is giving out money to sleezeball homeowners that overcharge me for rent. Sorry can't talk to you I have to go watch Secrets to buying Forclosed Homes

Posted by: hannible at March 10, 2009 7:20 PM

Montague is kind of a strange street, and I agree that the demographics probably contribute to the up and down nature of retail.

I remember Montague having a Fish's Eddy outlet for a while. Then it just vanished. One of the few reasons to actually go down there.

But we were there a few weeks ago and tried *Lantern Thai* restaurant. Wow, it was EXCELLENT. Beautiful presentation on the food, the duck salad we shared was the best I've ever had. I hope this restaurant does well and people in the neighborhood support it.

Maybe the downturn will help and some businesses with a little more energy will pop up. Montague just has this stuffy vibe that I don't totally get. It's a beautiful street to walk on though and I'd like to see it thrive.

Posted by: dash at March 12, 2009 8:46 PM

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March 10, 2009

High Rents Killing Montague Street

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