Greedy Landlords Causing Storefronts to Sit Empty?
The Daily News has a story about how the one-two punch of unrealistically high asking rents and the recession has resulted in a number of empty storefronts in brownstone Brooklyn. Cases in point, where retail spaces are still empty after rent increases: the dry cleaner on Court and Baltic that had to vacate after the…
The Daily News has a story about how the one-two punch of unrealistically high asking rents and the recession has resulted in a number of empty storefronts in brownstone Brooklyn. Cases in point, where retail spaces are still empty after rent increases: the dry cleaner on Court and Baltic that had to vacate after the landlord hiked the rent from $2,500 to $6,500 a month; Royal Video, above, which left its old Flatbush Avenue spot for a smaller one after the landlord was said to be asking $10,000 a month for the space; and a Myrtle Avenue shoe repair that shut down this fall. It seems, however, that while there are certainly examples of greedy/delusional landlords to be found, there aren’t an overwhelming number of fresh vacancies on the main retail drags in Cobble Hill, Prospect Heights, and Park Slope—that these guys tend to be the exception, rather than the rule. Thoughts?
Brooklyn Storefronts Empty [NY Daily News]
Photo by plangently.
A business that can’t make money paying market rent at a location doesn’t belong at that location. End of discussion.
Bxgrl – “It’s a lot more than the cost of overhead. The bridal business was not growing fast enough to enable these old businesses to keep up with huge increases- that happened much more quickly.”
and so a slow(er) growing business can no longer afford prime real estate in the largest metropolis in the country….
2 choices – 1. Force LL and/or Govt to subsidize the industry until eventually the tighter margins and slower growth kills it off or 2. Let economics rule and have the industry adapt or die and have more growth oriented businesses take the RE and hopefully thrive.
Again – its sad & painful but its life…..there used to be a typewriter district and slide rule stores too.
grand Army- that is precisely what the city should do- empty commercial and residential units should be taxed while they are vacant (after a reasonable grace period). As the B’stoner rant goes, they’re not making any more land, so the city has an interest in ensuring that all land is used to its greatest benefit. As pointed out above, empty store fronts can increase blight and they also deny the community added amenities. The cost for this should be taxed to the owners.
Bxgrl;
I’m sorry, but what you are saying just proves my point.
If the owners of these businesses idid not understand that:
-they were in a slow-growing business;
-they were located blocks from a growing commercial office market district that commanded much higher rents, and made no plans to create a new “district” somewhere else;
they deserved to go out of business for lack of savvy.
The Fultion Fish Market moved to the Bronx and they’re still doing well. Also, the food warehousing business moved years ago from the Navy Yard area to Canarsie, for the same reasons.
fsrg- as I said to benson, this was a supplier. He also supplied the garment industry, floral industry, interior design industry and millinery industry. Your argument relates to Kleinfeld’s, not this guy. Another thing is that a lot of the old time landlords were on good terms with their tenants. When ownership turned over to bigger RE firms, those new landlords had no attachment to or history with their tenants or area. They didn’t care one way or another- and that is a shame.
Kleinfeld’s deals in big ticket retail items- dresses and accessories. They were also never in a bridal “district.” The businesses in the garment center were the wholesale suppliers who have to do much more volume to make up the money. Many of those businesses had been in their spaces for over 50 years with incremental increases over time. But they started getting socked with huge increases that drove them out. I used to be “in the business”- I knew the people, still know some that have managed to hang on. Once they were priced out of the trim district and bridal districts, customers didn’t usually follow them to an out of the way location. It’s a lot more than the cost of overhead. The bridal business was not growing fast enough to enable these old businesses to keep up with huge increases- that happened much more quickly. YOu should learn all the facts before you claim the story doesn’t hold together.
Bxgrl – it is definitly sad when a longtime business goes out – but using your example – a bridal shop – I find it hard to feel sorry for a bridal shop owner who is hit by high market rate rents.
I only have been married once (thank god) and I could be wrong but based on the thousands (if not tens of thousands) that a bridal shop charges for the dresses – it seems to me that bridal shops certainly are familiar with the benefits (and downsides) of timing in a buisness transaction. And they appear (at least at 1st glance) to generate healthy margins based on that niche.
Now I may have bitched and moaned a bit at the time, but I do not begrudge the bridal shops for charging what they can, or accuse them of being “greedy” or preventing people from getting married or anything.
But just like a wedding, the lease expiration is an event that comes but once (or twice or 3x) in a lifetime and just like the future bride must budget and plan for her big day (or days) so too must the bridal shop owner who more than anyone knows how much you can charge when one waits to the last minute.
Point is – it sucks – but it is life
And if the market rate really was $30,000 then there’s no reason the landlord should be accepting anything as low as $5,000.
benson’s right, that negotiation should have been started a few years in advance of the end of the lease if things were that out of proportion.
“One old time very famous bridal business, a successful one, had to close up when the landlord decided to raise their rent from 5000 to 30,000”
Bxgrl;
Not for nothing, but this story doesn’t hang together.
If the proprietor was any type of savvy business person, he or she would have been preparing for the lease renewal negotiation. Part of that preparation would have included scouting for alternative lcations, in case the current landlord asked for the moon. If they were indeed a successful enterprise, they could have moved without damaging their business. For example, Kleinfeld’s was able to move, and their business is better than ever.