The Village Alliance, as part of its Retail Attraction Program, has identified four best practice examples for commercial property owners seeking new tenants, and temporary space activations.
Like many areas of New York City, parts of the Village Alliance district are experiencing higher than usual levels of storefront vacancy, particularly Eighth Street and Sixth Avenue.
However, we are still strongly positioned to attract new businesses. Our neighborhood is anchored by subway lines, bus routes, and Citi Bike docks, bringing millions of commuters into the area annually. It is also home to a growing young, affluent population with a median income of $105,000.
Three world-class schools, New York University, Cooper Union, and The New School, each call the area home. Their programs such as Campus Cash help ensure 66,000 students make significant contributions to the local economy.
Our main commercial corridor, Eighth Street, attracts daily foot traffic in excess of 60,000 on weekdays and over 68,000 at weekends. With rents, ranging from just $100 to $150 the street is one of Manhattans most attractive propositions for businesses seeking a new location in a globally famous neighborhood.
Our Four Best Practice Methods For Attracting Tenants
White Box Your Space
Competition is fierce and it has generally been a tenants market since 2017. Outdated and messy interiors do not show well when compared to new buildings; spending the money to white box your space will make an older property appear brand new and reduce upfront costs that a new tenant would otherwise have to spend. Also, if your property can be vented for a food use, consider adding ventilation to make the space more desirable as the saying goes, if you can vent it, you can rent it. Gone are the days of potential tenants clamoring to be in a space no matter the condition astute property owners put the investment in up front to make the vacant space more competitive.
Understand Which Tenants Will Succeed
What retail does the neighborhood need and what will successful retail look like in coming years? Market analysis shows that the central Village could use more home furnishing stores, gifts and apparel retailers, and anything aimed at kids given the explosive growth of young families in recent years. And of course, restaurants and food markets will always be patronized. (Note that massage and other physical culture (e.g., gym) uses are illegal on 8th Street without receiving a special permit from the City, and that inspectors do crack down and issue violations to building owners for this type of use.)
How do you know which tenants will succeed in the long run? First, make sure your potential tenant has a solid business plan, just opening the doors and expecting to pull in customers off the street is a failed strategy of the past. Savvy retailers must use inventive marketing and offer quality goods and service if they are to succeed and compete in todays market. There are two excellent articles on the future of retail that will help you identify good tenants for the long haul. This recent New York magazine pieceexplores which retail formats work in "the age of Amazon", while Vend discusses the top 12 retail trendsfor 2018 and beyond.
The rise of pop-up uses is a new source of short-term income for property owners and can be a soft entry for a brand or retailer that wants to test a neighborhood before committing to a longer-term lease. Historically seen around Halloween or the holidays, pop-ups are now in fashion at any time of year and can take many forms. There are agencies that specialize in brokering deals between brands and potential spaces at no cost to the property owner, for example, Storefront and Appear Here.
Greenwich Village is a popular neighborhood to host pop-up concepts and from an optics perspective, it is much better for spaces to be in temporary use than vacant in order to attract long-term tenants.
Consider Creative Lease Terms
Both tenants and owners are more reluctant these days to commit to the typical 10-year retail lease. Newer lease structures are becoming more popular, for example, that are either shorter (five years) and/or begin with a lower rent that has higher than usual escalation (>3%) in later years. Since there is an abundant supply of space on the market, tenant improvement (TI) money is also a common incentive given in new retail leases.
Our Planning & Economic Development team frequently works with prospective businesses, property owners, and commercial brokers who are considering Greenwich Village. We provide free guidance on local land marking and zoning regulations as well as detailed data about starting a business in the neighborhood, or relocating here.