This weekend I walked along the start of Bleecker street in the West Village area of Manhattan.
This quaint stretch of Bleecker street has long since been a bustling retail area, now home to famous stores such as Magnolia Bakery and Marc Jacob’s bookstore Bookmarc.
However, the thing that struck me the most was how many small beautiful retail units were empty and up for lease. More than 30% of the street was currently not leased out, and it got me thinking – is that not a huge neon warning sign to landlords in the area that they are perhaps asking unreasonable amounts of rent? Clearly retailers aren’t surviving there and empty units are not going to help the ones still trying. Isn’t it better to lease it out for less but keep the area full and attractive? As a landlord, if you can see your unit is amongst many other empty units in the same street, surely you would change tactic slightly?
Knowing from experience the true cost of brick and mortar retail, there is a limit as to how much rent you can pay, no matter the address or popularity of the area. You simply cannot produce a profitable formula if the fixed costs are too high in the first place.
It makes me frustrated that this is happening in so many fabulous places around the world and yet landlords are choosing to let units sit empty rather than offering more reasonable terms to prospective retailers.
And in true irony to the struggling small retail in this particular area, only 5 minutes down the road, Restoration Hardware just opened a glittering 5 storey 90,000 square foot store in the meat-packing district! Woah.
What are your thoughts on this topic? Where are you seeing this happen?