As Manhattan retail rents fell during the pandemic, they surged in the outer boroughs — a boon to commercial property owners in those areas. A new report shows just how much, and where.
From 2019 to 2021, the median storefront rent per square foot increased 23 percent in Brooklyn, 14 percent in the Bronx and 9 percent in Queens, the New York Times reported. It was down 11 percent in Manhattan and flat on Staten Island.
A jump in demand from entrepreneurs allowed landlords to hike rents well beyond that in certain areas, including 38 percent in the Rockaways and 33 percent in Bronx neighborhoods Concourse and High Bridge.
Prior to the pandemic, annual rent increases of 3 percent were typical. The numbers come from Department of Finance data analyzed by the Association for Neighborhood and Housing Development.
Commercial tenants don’t have the same protections as residential tenants, giving landlords more leverage to raise rents when the market picks up. Many immigrant store owners operate on monthly lease agreements, which means landlords can quickly adjust depending on demand and their individual needs.
The outer-borough retail rent boost came as former commuters to Manhattan began working from home and small businesses proliferated. Business applications rose 30 percent in the outer boroughs between 2019 and 2021, according to an analysis of U.S. Chamber of Commerce data by the Center for an Urban Future, led by a 66 percent jump in the Bronx.
Storefront rents increased disproportionately in communities of color, which made up 72 percent of the population in the districts where rent went up.
The Times story made no apparent attempt to reach commercial landlords or the business improvement districts that represent them on many commercial strips.
A spokesperson for the mayor’s office told the publication that it was “doing everything we can to make sure small business owners are able to keep the storefronts they worked so hard to build,” pointing to the Commercial Lease Assistance Program, which has helped 2,000 businesses.
— Holden Walter-Warner
Read more
