7 ms·

I don't think this is that landlords have too much money. Commercial leases are typically quite long; 10 years is quoted in the article. Landlords don't want

I don't think this is that landlords have too much money. Commercial leases are typically quite long; 10 years is quoted in the article. Landlords don't want to be locked into a price for 10 years that could be a momentary downturn. When you look at it at these time horizons, being vacant for 1 year and renting for your asking price is as good as giving someone a 10% discount to start a lease today. I do think there should be a blight tax though to encourage real estate developers to find a short term use for the space.

robbyt 9y ago
There are plenty of business in NYC that would be very happy to have an affordable lease on that street for even 6 months. Only big slow companies want long leases, and only big companies can afford the bloated rent. I don't agree that the root issues is the duration of the lease.
- Eridrus 9y ago
  Right, but when you say affordable, you probably mean something like a 50%+ discount, which is probably going to be more hassle than it is worth at the moment. Not that price anchoring isn't real, and landlords are often shitty, but I doubt there are plenty of businesses interested in a short term lease for a 10% discount. "Arleen Bowman Boutique" had a 10 year lease and wasn't exactly a big business, so I don't think that big businesses are the only ones who want long leases; I think your comment says more about the desirability of the real estate that people will deal with imperfect conditions to get a deep discount.
  - robbyt 9y ago
    Emperically, a friend's bag company rented space in the LES for 1 month last December, and broke even on sales. This company is online only, and they justified the storefront as a marketing opertunity. The space cost them $18k for the month (which is low, considering the area), and the only reason they got that price is because a big company backed out on their pop-up store deal.
    - Eridrus 9y ago
      I think that's great; I think we should be incentivizing that sort of thing, but I'm sure you can imagine real estate companies are probably not angling to work on 18k deals that have only a marginal impact and distract them from trying to find someone who wants a 10 year multi-million dollar lease. Not because they have too much money, but because these tiny deals are probably a worse deal for them. The policy responses for "landlords have too much money" and "landlords are acting rationally by leaving their lots vacant" are quite different.
  - brenschluss 9y ago
    Hence the rise of the pop up store. 99 cent stores, beauty supply stores, and Halloween supply stores work this way too - easy move in/out, generic and cheap merchandise used by a wide audience that doesn't want to buy online, and so they can take advantage of short-term leases.

robbyt 9y ago

There are plenty of business in NYC that would be very happy to have an affordable lease on that street for even 6 months. Only big slow companies want long leases, and only big companies can afford the bloated rent. I don't agree that the root issues is the duration of the lease.

Eridrus 9y ago
Right, but when you say affordable, you probably mean something like a 50%+ discount, which is probably going to be more hassle than it is worth at the moment. Not that price anchoring isn't real, and landlords are often shitty, but I doubt there are plenty of businesses interested in a short term lease for a 10% discount. "Arleen Bowman Boutique" had a 10 year lease and wasn't exactly a big business, so I don't think that big businesses are the only ones who want long leases; I think your comment says more about the desirability of the real estate that people will deal with imperfect conditions to get a deep discount.
- robbyt 9y ago
  Emperically, a friend's bag company rented space in the LES for 1 month last December, and broke even on sales. This company is online only, and they justified the storefront as a marketing opertunity. The space cost them $18k for the month (which is low, considering the area), and the only reason they got that price is because a big company backed out on their pop-up store deal.
  - Eridrus 9y ago
    I think that's great; I think we should be incentivizing that sort of thing, but I'm sure you can imagine real estate companies are probably not angling to work on 18k deals that have only a marginal impact and distract them from trying to find someone who wants a 10 year multi-million dollar lease. Not because they have too much money, but because these tiny deals are probably a worse deal for them. The policy responses for "landlords have too much money" and "landlords are acting rationally by leaving their lots vacant" are quite different.
- brenschluss 9y ago
  Hence the rise of the pop up store. 99 cent stores, beauty supply stores, and Halloween supply stores work this way too - easy move in/out, generic and cheap merchandise used by a wide audience that doesn't want to buy online, and so they can take advantage of short-term leases.