4 ms·

A standard storefront lease is for 10 years. If you believe you can get 12% higher rent by waiting for a year, it's worthwhile to leave the space empty. What I

A standard storefront lease is for 10 years. If you believe you can get 12% higher rent by waiting for a year, it's worthwhile to leave the space empty. What I don't get is why there aren't more fun pop-up shops appearing in these spaces?

andrewlevine 9y ago
I'm still skeptical (tell me what I'm missing) - are commercial real estate prices in NYC really going up 10% / year? Certainly as a residential renter for ~12 years (in the same areas that have high vacancies) I haven't seen a rent increase like that.
- twobyfour 9y ago
  It's not necessarily a market price increase that they're waiting for, but rather a higher bidder. Why rent now to a (price-sensitive) local pizza parlor if you have a chance to land a national bank that can afford double the rent without a second thought?
  - saurik 9y ago
    That makes sense to me if I saw properties lying fallow for a year or two... but there are tons of properties that just sit unused for many many years. I honestly don't remember the last time there was something in the amazingly-located spot next door to the Apple store in downtown Santa Barbara. I frankly bet it was longer than ten years ago! What are they waiting for? Bankruptcy?! I just don't get it :(. There are also lots of businesses that would be willing to sign on for just a year or two instead of for ten years. Hell: the average life expectancy of many businesses isn't even ten years, so you are essentially just refusing to sell your wasting good (minutes of building) to people who would love to pay you for it due to "I guess this is how people normally do it", which is insane.
    - bsder 9y ago
      > I honestly don't remember the last time there was something in the amazingly-located spot next door to the Apple store in downtown Santa Barbara. I frankly bet it was longer than ten years ago! What are they waiting for? The answer is probably that Apple has a clause in the contract that says that if you give another client a better price than you gave Apple, Apple gets to renegotiate. If you got a particularly good rent from Apple, it's probably better to leave the place beside completely empty.
    - stevesearer 9y ago
      You may be interested to know that spot next to the Apple Store was recently filled and is a furniture / interior decorating shop now.
jseliger 9y ago
If you believe you can get 12% higher rent by waiting for a year, it's worthwhile to leave the space empty. An interesting comment that dovetails nicely with this: https://news.ycombinator.com/item?id=16002397 https://news.ycombinator.com/item?id=16002397 : Seems simple to fix. A building sitting vacant is depressing everything around it, pushing an external cost onto the city. Leave it vacant and your property taxes triple to offset this cost. Such a policy would probably need fine-tuning (e.g. what is the optimal number of months before taxes kick in, what is the optimal rate schedule, etc.), but it seems reasonable on its face.
czinck 9y ago
I wish the popup shops were more frequent. 2 or 3 years ago there was a vacant store front on 39(?)th and Madison. Instead of just leaving it like that, the landlord turned it in to a private motorcycle museum. I got to walk by some very good looking classic bikes, he got to show off the shop.

andrewlevine 9y ago

I'm still skeptical (tell me what I'm missing) - are commercial real estate prices in NYC really going up 10% / year? Certainly as a residential renter for ~12 years (in the same areas that have high vacancies) I haven't seen a rent increase like that.

twobyfour 9y ago
It's not necessarily a market price increase that they're waiting for, but rather a higher bidder. Why rent now to a (price-sensitive) local pizza parlor if you have a chance to land a national bank that can afford double the rent without a second thought?
- saurik 9y ago
  That makes sense to me if I saw properties lying fallow for a year or two... but there are tons of properties that just sit unused for many many years. I honestly don't remember the last time there was something in the amazingly-located spot next door to the Apple store in downtown Santa Barbara. I frankly bet it was longer than ten years ago! What are they waiting for? Bankruptcy?! I just don't get it :(. There are also lots of businesses that would be willing to sign on for just a year or two instead of for ten years. Hell: the average life expectancy of many businesses isn't even ten years, so you are essentially just refusing to sell your wasting good (minutes of building) to people who would love to pay you for it due to "I guess this is how people normally do it", which is insane.
  - bsder 9y ago
    > I honestly don't remember the last time there was something in the amazingly-located spot next door to the Apple store in downtown Santa Barbara. I frankly bet it was longer than ten years ago! What are they waiting for? The answer is probably that Apple has a clause in the contract that says that if you give another client a better price than you gave Apple, Apple gets to renegotiate. If you got a particularly good rent from Apple, it's probably better to leave the place beside completely empty.
  - stevesearer 9y ago
    You may be interested to know that spot next to the Apple Store was recently filled and is a furniture / interior decorating shop now.

jseliger 9y ago

If you believe you can get 12% higher rent by waiting for a year, it's worthwhile to leave the space empty. An interesting comment that dovetails nicely with this: https://news.ycombinator.com/item?id=16002397 https://news.ycombinator.com/item?id=16002397 : Seems simple to fix. A building sitting vacant is depressing everything around it, pushing an external cost onto the city. Leave it vacant and your property taxes triple to offset this cost. Such a policy would probably need fine-tuning (e.g. what is the optimal number of months before taxes kick in, what is the optimal rate schedule, etc.), but it seems reasonable on its face.

czinck 9y ago

I wish the popup shops were more frequent. 2 or 3 years ago there was a vacant store front on 39(?)th and Madison. Instead of just leaving it like that, the landlord turned it in to a private motorcycle museum. I got to walk by some very good looking classic bikes, he got to show off the shop.