NYC businesses fall as rent keeps getting higher

Amanda Salazar

A brief walk down New York City streets yields an unfortunate sight: an array of closed and closing stores along with for rent and for sale signs decorating awnings and glass store fronts.

New York City is known to be an expensive place to live and work — the most expensive city to live in, according to an article from Investopedia, where the average cost of living is 120% higher than the national average  — but it’s come to a point where even businesses can’t afford to stay.

Local family stores have been hit hard in recent years by the city’s rising rents, forcing some to close up permanently. 

For bigger retailers, online shopping has rendered their storefront shops unnecessary and inconvenient.

With rents hitting new heights, mom and pop shops cannot afford to pay their rent, as their sales don’t generate enough money to pay for it.

“City Council researchers reported that average Manhattan rents rose 44%, to $156 per square foot, between 2006 and 2016,” according to an article in Bloomberg News.

The article went on to say that “in Brooklyn, retail rents averaged at least $100 per square foot in 15 neighborhoods as of 2017, up from three in 2007.”

Big corporate chains, on the other hand, can afford to pay for their street spots and aren’t affected quite to the degree as smaller stores, although there are some chain stores who have moved out of the city as well, according to The New York Times.

Other businesses aren’t just tackling high rent but are also losing business to Amazon, Etsy and other online stores that allow people to shop for any type of good all at the same time, without the inconvenience of leaving their house.

This all has resulted in strips of vacant stores in popular shopping sites in the city, mainly in Brooklyn and Manhattan. Areas like Times Square, Williamsburg, Chinatown, Harlem and Crown Heights are just some of the neighborhoods that were affected the most. The stores that remain are mainly chains, or the last few family businesses trying to hold on.

Manhattan’s retail space is up to 20% vacancy, reported both Bloomberg and The New York Times. The equivalent statistics on Brooklyn retail space were not given. Part of the reason that so many storefronts are empty isn’t just because businesses are leaving, though that is obviously a large part of the problem, but that landlords aren’t getting new tenants.

While some people believe this is because the landowners are waiting for chain stores to buy the spot and pay “top dollar,” landlords tell a different story.

“Some landlords say they simply cannot find retail tenants willing to lock in long-term leases at rents that enable them to meet building payments,” says The New York Times article. 

“Others say that retailers are not biting, even at bargain rents. Whatever the factors, the vacancies are changing the look of the city’s streetscape.”