Commercial rates improve, big and small alike
Posted on 16. Sep, 2010 by Colby Hamilton in Uncategorized
The last year from retail vacancies outside of Manhattan has been rough. According to a CBRE Econometric Advisors report released last week, vacancies for community and neighborhood centers, such as large grocery stores and chain storefronts, was at 8.5 in the second quarter of 2009. In the first quarter of 2010 it was up to 8.7 percent.
But according to CBRE, things are improving. The vacancy rates for the second quarter of 2010 was down to 8.4 percent. Additionally, the city vacancy rate was far better than the national average of 13.1 percent.
CBRE’s report, though, was focused on only a specific sort of retail space. Smaller storefronts—the so-called mom-and-pops—were not part of the report. Yet, according to Massey Knakal Managing Director in Brooklyn Ken Krasnow, smaller commercial retail rental areas are showing the same improvement described in the CBRE report.
“Generally speaking the main retail corridors–the Flatbush Avenues, the Atlantic Avenues–throughout Brooklyn and Queens have definitely stabilized,” Krasnow said. “Most of 2009 they were on the wrong side of the growth curve.”
Krasnow said there remained a concern over rental prices, which continue to be far below the highs a few years ago. However, he said those, too, were showing signs of improvement. “The good news is the pricing is not declining anymore,” he said.
Conversations with numerous directors of BIDs—local business districts made up mostly of smaller, independent businesses—supported Krasnow’s statements. There were clear, broad signs of improvement, however modest, as vacancy rates stopped increasing and, in a number of BIDs, had significantly fallen.
“I think we’re all on the up-climb if you will,” said Sharon Davidson, the North Flatbush Avenue BID’s executive director. She said the Brooklyn business district had seen a vacancy rate upwards of 21 percent last year. That rate had fallen to 15 percent this year.
In the Bronx, Fordham Road BID’s deputy executive director Daniel Bernstein said his businesses had mostly dodged the recession bullet: vacancy rates had remained almost unchanged from their pre-recession levels—3.5 percent three years ago to 4.5 percent today. He said most of the vacancies today were in the same spot before the recession.
“I wouldn’t foresee it going up. I would possibly see it staying where it is,” Bernstein said of the vacancy rate. He said, while times are still tough, the long-term economic possibilities in the area have kept small businesses from leaving.
On Staten Island, the message was the same: business is, at the very least, getting better. Forest Avenue BID’s executive director Susan Meeker, said that not only had vacancy rates continued to remain very low, long-term property vacancies—one which has lasted two decades—are filling up.
“Right now we’re actually seeing lots of new businesses open up,” Meeker said.
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