7 ms·

I live in manhattan and I feel this story is a bit exaggerated, or at least I don't see the author's reality. (Him quoting a Real Estate firm, which is interes

I live in manhattan and I feel this story is a bit exaggerated, or at least I don't see the author's reality. (Him quoting a Real Estate firm, which is interested in activity, doesn't give credence to the data). The turnaround of restaurants and bars here is amazingly fast. When one fails, another one springs up. The same street will have very different storefronts each year. I once asked a restaurant owner, on how is this possible. He told me: Rent is expensive, and if you open a restaurant that is not doing well (attracting the clientele to afford staying afloat), is it much better to shut it down otherwise it becomes a huge money pit. What often happens is this: One person signs a long term lease for some kind of business (retail, food, whatever). The business is not doing well, he decided to shut it down and sub-lease the space. (this is easier when the market rates have risen). The second guy does give a try to his dream bar/restaurant/retail. If it doesn't work, he is forced to shut it down as well, rinse and repeat until you have a business that has the right winning formula and sticks around. This is 'creative destruction' on steroids. What I have seen in manhattan since I moved here in 2013: More hipster style coffee shops. More pizza places. Less "cheap" retail, and more luxury good stores. So, he is right, that cheap retail is generally pushed out because of the amazon effect, but in the other hand things like "thrift / second hand clothes" stores, are doing well. What is replacing those 'cheap' stores is generally things in the food business: Cupcake stores, Ice Scream Parlors, Yogurt bars, and yes nail saloons as well. But my success story (at least for my part), are coffee places. Birch Coffee, Tobby's Estate, Greggory's Coffee, etc.... all started in NYC, and they are striving and opening in countless locations.

njn 8y ago
Right, cause coffee is so hard to make yourself. I guess I'll never understand the point of hipster coffee shops. I'm all for cozy cafes, but all the hipster style coffee places, like 9th st. espresso, are the opposite of that: more catering to the trendy, minimalist, i3-gaps ikea aesthetics of the mainstream of /r/unixporn.
- sergius 8y ago
  They provide a place to sit and use free WiFi...
- addicted 8y ago
  This was always the case. Coffee shops are more about hanging out and finding a casual environment to work than about the coffee. You could replace the coffee with an hourly charge and it would probably have the same effect, except people are not really used to paying for a place to sit, so coffee becomes the way to extract the money. At least that’s how I, as someone who doesn’t drink coffee but finds himself in coffee shops all the time, perceive it.
  - ghaff 8y ago
    Back in the day before WiFi became ubiquitous Internet cafes were pretty common in a lot of cities. We still have them but we pretend they're coffee shops and subsidize seats with coffee purchases and assume the economics work out in the end.
- ardit33 8y ago
  You are missing the point. If coffee places, cupcake stores, and bodegas (which are not luxury good sellers) can thrive and expand, then it is not necessary the story of: "rents pushing great businesses away", more of: Not so great Business that are not solving the right needs at the right price are dying. Creative destruction on steroids....
- dionidium 8y ago
  I don't usually carry an espresso machine with me as I walk around the city, so, actually, yes, if I want to drink an espresso while I'm out, then I'll probably need to buy it from a coffee shop.
  - smileysteve 8y ago
    As if half the customers aren't ordering iced coffee.
    - TomVDB 8y ago
      Do you carry an ice bucket when walking around town?
    - dionidium 8y ago
      If it's not obvious to you that you can replace "espresso" with literally any beverage on the planet, then you didn't get my point.
blindwatchmaker 8y ago
> The turnaround of restaurants and bars here is amazingly fast. When one fails, another one springs up. The same street will have very different storefronts each year. Is that supposed to be a positive thing? Sounds pretty unstable and a terrible detriment to developing an actual neighbourhood.
- addicted 8y ago
  Not generally. The good stuff will stick around. The stuff that isn’t as good wont. Most cities are about change, and while nostalgia is great, cities that look the same as they did 20 years previously usually are not successful cities. The reason is simple. Cities tend to attract younger folks. As the generation of people they attract changes, the tastes they need to cater to also changes.
  - achileas 8y ago
    Timespan matters. If businesses repeatedly don't do well, yes you get your 'fun' upper middle class variety, but the people trying to get a foothold and start businesses will fail and, with the lack of a real safety net, likely not open up further businesses. If that becomes the majority of small business owners in an area, wave goodbye to your 'fun' variety, small businesses, and hello to becoming Cleveland. I'm lucky that when my family came to America, it was still possible (and, more importantly, probable) to open a small business and build enough up to send your kids to college, expand your business, etc. Now, in order to be successful, you have to buy the property your shop is in too as a hedge against a downturn in business (more important in places with seasons when foot traffic declines), which reduces opportunity to entrepreneurs with fewer resources.
  - bpicolo 8y ago
    > The stuff that isn’t as good wont Tons of good stuff closes in Manhattan.
    - malandrew 8y ago
      San Francisco too. Three of my favorite restaurants closed in the last year.
huehehue 8y ago
I've noticed a lot of nail salons, barber shops, cheap takeout places, and similar somehow managing to stay afloat despite being located in low-income areas with little foot traffic (in Manhattan). They're also usually empty. Is there some common situation where store owners can enjoy extremely low rent? Or is it common for people to inherit commercial space? Or perhaps these places are changing owners behind the scenes. *The author does claim these businesses thrive because "you won’t find their services on Amazon", but he's probably referring to the shops with customers.
- clubm8 8y ago
  >I've noticed a lot of nail salons, barber shops, cheap takeout places, and similar somehow managing to stay afloat despite being located in low-income areas with little foot traffic (in Manhattan). They're also usually empty. A lot of seemingly "empty" restaurants do a brisk delivery business, especially now that Grubhub can make it so they don't have to hire delivery drivers.
da02 8y ago
Are their profit margins (even with high prices) paper thin? Maybe the people making money are the one selling franchises? (Pardon for my lack of understanding of the retail NYC market.)
- gowld 8y ago
  If there are no vacancies, all the profit is going to the landlords (monopolists)
subpixel 8y ago
You're missing a critical element of this scenario: key money. When business A fails, the owner does not sublet to business B - they sell their lease, and they charge a hefty fee. So business B has to pay for the privilege of paying already exorbitant rent. Also, with respect if you moved to NYC in 2013 you've never actually experienced what came before hyper-gentrification.
- bko 8y ago
  > When business A fails, the owner does not sublet to business B - they sell their lease, and they charge a hefty fee. So business B has to pay for the privilege of paying already exorbitant rent. If business A can sell the lease for a premium then the market rate for that lease is higher than originally signed. Even if they broke the lease, the owner would likely charge the higher rate to business B. The owner won't just automatically just give the new lessee the same terms
  - subpixel 8y ago
    Commercial retail leases in NYC make specific provisions for key money. It's completely above-board and does not break the lease.
dawhizkid 8y ago
I don't think it's that exaggerated. The author is totally correct on West Village, for example. I don't live in NYC anymore but each time I visit it the mix of store noticeably changes (so yes, a lot of turnover) and at least 1 in 4 storefronts are closed/for lease. Ironically the ones with staying power are those sketchy cheap jewelry stores that are of course not money laundering operations.
trisomy21 8y ago
As an FYI, Toby’s Estate started in Australia.

njn 8y ago

Right, cause coffee is so hard to make yourself. I guess I'll never understand the point of hipster coffee shops. I'm all for cozy cafes, but all the hipster style coffee places, like 9th st. espresso, are the opposite of that: more catering to the trendy, minimalist, i3-gaps ikea aesthetics of the mainstream of /r/unixporn.

sergius 8y ago
They provide a place to sit and use free WiFi...
addicted 8y ago
This was always the case. Coffee shops are more about hanging out and finding a casual environment to work than about the coffee. You could replace the coffee with an hourly charge and it would probably have the same effect, except people are not really used to paying for a place to sit, so coffee becomes the way to extract the money. At least that’s how I, as someone who doesn’t drink coffee but finds himself in coffee shops all the time, perceive it.
- ghaff 8y ago
  Back in the day before WiFi became ubiquitous Internet cafes were pretty common in a lot of cities. We still have them but we pretend they're coffee shops and subsidize seats with coffee purchases and assume the economics work out in the end.
ardit33 8y ago
You are missing the point. If coffee places, cupcake stores, and bodegas (which are not luxury good sellers) can thrive and expand, then it is not necessary the story of: "rents pushing great businesses away", more of: Not so great Business that are not solving the right needs at the right price are dying. Creative destruction on steroids....
dionidium 8y ago
I don't usually carry an espresso machine with me as I walk around the city, so, actually, yes, if I want to drink an espresso while I'm out, then I'll probably need to buy it from a coffee shop.
- smileysteve 8y ago
  As if half the customers aren't ordering iced coffee.
  - TomVDB 8y ago
    Do you carry an ice bucket when walking around town?
  - dionidium 8y ago
    If it's not obvious to you that you can replace "espresso" with literally any beverage on the planet, then you didn't get my point.

blindwatchmaker 8y ago

> The turnaround of restaurants and bars here is amazingly fast. When one fails, another one springs up. The same street will have very different storefronts each year. Is that supposed to be a positive thing? Sounds pretty unstable and a terrible detriment to developing an actual neighbourhood.

addicted 8y ago
Not generally. The good stuff will stick around. The stuff that isn’t as good wont. Most cities are about change, and while nostalgia is great, cities that look the same as they did 20 years previously usually are not successful cities. The reason is simple. Cities tend to attract younger folks. As the generation of people they attract changes, the tastes they need to cater to also changes.
- achileas 8y ago
  Timespan matters. If businesses repeatedly don't do well, yes you get your 'fun' upper middle class variety, but the people trying to get a foothold and start businesses will fail and, with the lack of a real safety net, likely not open up further businesses. If that becomes the majority of small business owners in an area, wave goodbye to your 'fun' variety, small businesses, and hello to becoming Cleveland. I'm lucky that when my family came to America, it was still possible (and, more importantly, probable) to open a small business and build enough up to send your kids to college, expand your business, etc. Now, in order to be successful, you have to buy the property your shop is in too as a hedge against a downturn in business (more important in places with seasons when foot traffic declines), which reduces opportunity to entrepreneurs with fewer resources.
- bpicolo 8y ago
  > The stuff that isn’t as good wont Tons of good stuff closes in Manhattan.
  - malandrew 8y ago
    San Francisco too. Three of my favorite restaurants closed in the last year.

huehehue 8y ago

I've noticed a lot of nail salons, barber shops, cheap takeout places, and similar somehow managing to stay afloat despite being located in low-income areas with little foot traffic (in Manhattan). They're also usually empty. Is there some common situation where store owners can enjoy extremely low rent? Or is it common for people to inherit commercial space? Or perhaps these places are changing owners behind the scenes. *The author does claim these businesses thrive because "you won’t find their services on Amazon", but he's probably referring to the shops with customers.

clubm8 8y ago
>I've noticed a lot of nail salons, barber shops, cheap takeout places, and similar somehow managing to stay afloat despite being located in low-income areas with little foot traffic (in Manhattan). They're also usually empty. A lot of seemingly "empty" restaurants do a brisk delivery business, especially now that Grubhub can make it so they don't have to hire delivery drivers.

da02 8y ago

Are their profit margins (even with high prices) paper thin? Maybe the people making money are the one selling franchises? (Pardon for my lack of understanding of the retail NYC market.)

gowld 8y ago
If there are no vacancies, all the profit is going to the landlords (monopolists)

subpixel 8y ago

You're missing a critical element of this scenario: key money. When business A fails, the owner does not sublet to business B - they sell their lease, and they charge a hefty fee. So business B has to pay for the privilege of paying already exorbitant rent. Also, with respect if you moved to NYC in 2013 you've never actually experienced what came before hyper-gentrification.

bko 8y ago
> When business A fails, the owner does not sublet to business B - they sell their lease, and they charge a hefty fee. So business B has to pay for the privilege of paying already exorbitant rent. If business A can sell the lease for a premium then the market rate for that lease is higher than originally signed. Even if they broke the lease, the owner would likely charge the higher rate to business B. The owner won't just automatically just give the new lessee the same terms
- subpixel 8y ago
  Commercial retail leases in NYC make specific provisions for key money. It's completely above-board and does not break the lease.

dawhizkid 8y ago

I don't think it's that exaggerated. The author is totally correct on West Village, for example. I don't live in NYC anymore but each time I visit it the mix of store noticeably changes (so yes, a lot of turnover) and at least 1 in 4 storefronts are closed/for lease. Ironically the ones with staying power are those sketchy cheap jewelry stores that are of course not money laundering operations.

trisomy21 8y ago

As an FYI, Toby’s Estate started in Australia.