Retailers dip their toes with short-term deals

Number of leases shorter than 3 years more than quadrupled between 2016 and 2017

New York Weekend Edition /
Sep.September 02, 2018 03:00 PM

138 Greene Street (Credit: Thor)

With so much turmoil in the retail market, tenants are increasingly looking to do short-term deals.

Figures from CBRE show that since 2016, the number of retail leases inked for shorter than three years has increased dramatically, the Wall Street Journal reported.

Retailers are using the shorter terms to test out new locations and see where rents will go.

“The obvious positive on the tenant side is that they can test the market,” CBRE research manager Michael Slattery said.

CBRE counted 13 short-term retail leases in Manhattan in 2016. But by 2017 that figure had more than quadrupled to 53 deals. And 2018 is keeping pace with last year, with 28 short-term deals inked through the second quarter.

Soho, which has been hit hard by vacancies, had the heaviest concentration of short-term leases.

These kinds of deals can help landlords fill empty spaces and generate buzz for their properties, but they do pose a problem when building owners go to refinance or sell.

But landlords’ flexibility with short-term deals is helping improve leasing activity.

“It used to be landlords would dig in and wouldn’t back off rent that much, but now there are deals getting done,” SCG Retail’s David Firestein said. “It feels to me that the market is bottoming out.” [WSJ] — Rich Bockmann


Related Articles

arrow_forward_ios
27 Whitehall Street (Google Maps, iStock)
Fidi landlord accused of permitting massage parlor prostitution
Fidi landlord accused of permitting massage parlor prostitution
Isaac Kassirer and his properties at 1187-97 Anderson Ave., 1220 Shakespeare Ave., and 1210 and 1230 Woodycrest Ave. (Google Maps)
His portfolio decimated, Isaac Kassirer gets creative with rents
His portfolio decimated, Isaac Kassirer gets creative with rents
Mayor Bill de Blasio (Getty, iStock)
NYC to require vaccines for indoor dining, gyms and performance venues
NYC to require vaccines for indoor dining, gyms and performance venues
Family feud for $11M Lundy’s restaurant building boils over
Family feud for $11M Lundy’s restaurant building boils over
Family feud for $11M Lundy’s restaurant building boils over
The rise of e-commerce, fueled by the pandemic, has created unprecedented demand for cardboard-producing facilities. (iStock)
Cardboard demand could fuel an industrial real estate boom
Cardboard demand could fuel an industrial real estate boom
MSCI CEO Henry Fernandez and Real Capital Analytics founder Robert White (MSCI)
MSCI to acquire Real Capital Analytics for $950M
MSCI to acquire Real Capital Analytics for $950M
Donald Trump and the Trump International Hotel & Tower in Chicago (Getty, iStock)
Donald Trump is owed $1M tax refund on Chicago skyscraper
Donald Trump is owed $1M tax refund on Chicago skyscraper
From left: One WTC, Douglas Durst, Donald and Steven Newhouse (iStock, Getty)
Condé Nast pays back rent at One WTC, ending standoff with Durst
Condé Nast pays back rent at One WTC, ending standoff with Durst
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...