Walk along the two major shopping strips in Park slope, i.e., Fifth and Seventh Avenues, and we’re sure you’ll be struck, as we have been, by the number of storefronts currently for rent. In the past six months, a large handful of stores have gone out on Seventh Avenue just in the short walk from 9th Street to 12th Street: Buttermilk, Beet, Scalino, Fore Play, and Sport Prospect are all gone or soon to be so. Before them, the Pepper Mill deli space stood empty for over a year after that business succumbed to both a horrid renovation and a major rent increase. The situation is as bad at the north end of the avenue.
We’re all for getting market rates for commercial spaces, but it seems some property owners are pound wise and penny foolish (if we may turn an adage on its head), looking for long-term gains while accepting big short-term losses. If I own a rented storefront and make $6,000 per month from the active, going concern that’s in that space, Company A, do I want to raise the rent to $7,000 per month, losing that business, and having the space stand empty for perhaps a year until Company B comes along and is willing to meet my terms? I’ve missed $72,000 in rent during that year. With company B paying $7,000 per month, it will take me literally six years to make that $72,000 back. Six years just to break even.
During the vacancy year, the entire streetscape suffers from the loss of a business, including other businesses on the block and my upper-floor tenants who may feel less comfortable in the building. Plus, neighborhood residents might be less willing to shop or dine on the local strip if there are numerous empty storefronts, and prospective incoming residents might find the neighborhood less desirable than one with more vibrancy.
And what if Company B doesn’t make it in my space? I have to start the process all over again, with additional losses.
In the case of the South Slope, the storefronts on Seventh Avenue below Ninth Street were mostly empty in the early1980’s, and when the neighborhood began to gentrify a few years later, many stores came in together, or nearly so. As a result, many stores, even newer ones, have their leases up for renewal at about the same time. It doesn’t take many large rent hikes to lose a number of stores within months of each other. That seems to have happened now on Seventh Avenue in the Ansonia area of the South Slope.