Vacant storefronts in prime city areas are finding tenants, and many stores are seeing rents as high as they were in 2007. In order to survive, or find a bargain, retailers are getting creative and looking in less popular neighborhoods, or on side streets, according to the Wall Street Journal.
“It’s a tale of two cities,” said Gene Spiegelman, a broker at Cushman & Wakefield, of the price gap.
In 2008, retail vacancy reached 9 percent on the desirable upper stretch of Fifth Avenue, according to data provided by Faith Hope Consolo, chairman of retail leasing and sales at Prudential Douglas Elliman. The vacancy rate now sits around 7.5 percent. Rents fell to less than $2,000 a square foot, still the highest in the city. The vacancy rate hit 15 percent on Madison Avenue, according to Consolo, while in Soho, the rate went above 11 percent.
Starting last summer high-priced deals made their return to prime areas like Times Square, the Journal reported, which seemed to mean the end of bargains in prime areas.
Side streets however, or downtown locations, often don’t see the same growth. On Third Avenue on the Upper East Side, where furniture store CB2 just secured its new space, the vacancy rate still hovers at 11.4 percent.
Soho’s Crown Art Gallery, a 40-year fixture in the area, has seen other galleries come and go as a result of steep rent hikes. The gallery however, was recently able to double its space on quieter West Broadway. Its rent will only rise to $30,000 a month from $22,000.
“The rent is not affordable,” owner John Turan said. “The rent is very high, but because we sell high-end artwork, we can sell a Picasso or a Chagall for $150,000 or half-a-million dollars.” [WSJ]