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I feel like you're mischaracterizing the phenomenon, at least when it comes to NYC. This is not a product of falling demand - but rather rising prices, and lan

I feel like you're mischaracterizing the phenomenon, at least when it comes to NYC. This is not a product of falling demand - but rather rising prices, and landowners willing to endure extensive vacancies to prevent the market price from dropping. Increased interest in the area raised prices past the point of affordability for businesses. In a normal market this would result in price drops until landlords can find renters. What we are seeing instead is a concerted effort to maintain pricing through willingness to let storefront sit empty. Instead of lowering rents to attract tenants, landlords are simply tolerating vacancies. > "who wants to go to SOHO to buy clothes when you can do it online!" Bleecker St was home to high end fashion boutiques - a segment of retail that is still doing well in brick and mortar, and more resistant than other retail niches to the effects of ecommerce. The idea that everyone went online instead I don't think holds water. Importantly also, even if clothiers are increasingly online, other types of retail businesses (food? Fitness?) would step in to fill these spaces. This hasn't happened. >"you can see a lot of startup/coworking spaces taking advantage of the vacancies in these initial stages." This is precisely what isn't happening. Rents are too high for broad categories of businesses (including coworking spaces) - but rather than lower rents and get these spaces rented, landlords are holding firm instead.

nstj 9y ago
I was actually just paraphrasing the article when it came to falling demand (though I share the same view): > At a time when shoppers are buying online and fashion brands across the industry are hurting, “the challenging business environment makes it less interesting to do vanity locations,” I think it would be folly to think that there's a static or growing level of demand in physical retail relative to online shopping - even at the high end. I don't reasonably doubt that someone will be able to turn a profit with the increased rents, or that landlords don't want to drop the rent for a multitude of reasons (financing requirements included) but my point is that we're in a period where the sectors which typically could afford the high rents in places like these now can't. And my statement holds just as much for NYC as it does for other cities in the world - I was simply providing the Australian example as support. Remember when Virgin could afford renting half of Union Square to sell physical music? After it was empty for a while (much like Bleecker St) the DR and banks stepped in with a business which could afford the rent.

nstj 9y ago

I was actually just paraphrasing the article when it came to falling demand (though I share the same view): > At a time when shoppers are buying online and fashion brands across the industry are hurting, “the challenging business environment makes it less interesting to do vanity locations,” I think it would be folly to think that there's a static or growing level of demand in physical retail relative to online shopping - even at the high end. I don't reasonably doubt that someone will be able to turn a profit with the increased rents, or that landlords don't want to drop the rent for a multitude of reasons (financing requirements included) but my point is that we're in a period where the sectors which typically could afford the high rents in places like these now can't. And my statement holds just as much for NYC as it does for other cities in the world - I was simply providing the Australian example as support. Remember when Virgin could afford renting half of Union Square to sell physical music? After it was empty for a while (much like Bleecker St) the DR and banks stepped in with a business which could afford the rent.