As online shopping has decimated brick-and-mortar retail stores, New York City co-op and condo boards have taken steps to keep their commercial space from sitting empty. Some have dropped their rent. Others have signed long-term – up to 99-year – leases with third parties to guarantee a stable income.
Now, Crain’s reports, there are signs that New York City retail shopping isn’t dead, after all. While a recent Douglas Elliman survey found that empty retail space has nearly tripled to 20 percent in the past two years, retail employment in the city has increased by 6,000 jobs through July, compared with a gain of only 2,000 during the same period a year ago.
"Retail hasn’t looked this good since 2013," says David Belkin, who watches the numbers closely for the Independent Budget Office.
Nationally, the retail story is about the revival of brick-and-mortar. Retailers surprised analysts with strong sales for February, March and April. Retail jobs have grown an average of 50,000 a month nationwide since February, according to the National Retailer Federation.
So what gives with the worrisome increase in vacant storefronts? The New York mantra is that rents are too high, and that is surely a factor, though they are going to come down. More important is that a large number of smaller, local retailers simply don’t have the wherewithal to compete with Internet retailers. As online ventures continue to expand to virtually every niche – from mattresses to shaving supplies to any kind of food one wants – the squeeze will get tighter and tighter. Century 21 and Macy’s may be doing surprisingly well, but small local retailers, including mom-and-pops, will continue to struggle. And that brings us full circle: despite the boom in retail jobs, co-ops and condo with commercial spaces will continue to face serious challenges.
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