A quarter of the avenue's empty storefronts filled this year. The leases explain why
Shorter terms, shared spaces, and landlords who stopped waiting for a bank branch to come back.
The vacancy report that crossed desks this week carries a number downtown has not seen in six years: a quarter of the avenue's empty storefronts signed tenants since January. The interesting part is not the number. It is the leases.
The standard downtown retail lease — ten years, personal guarantees, rent set to what the block earned in 2014 — is quietly disappearing. What replaced it, in the deals that actually closed: two-year terms with renewal options, percentage rent in year one, and in four cases a landlord splitting one dead bank branch into three narrow bays.
The tenants tell the same story from the other side. A bakery that outgrew a farmers' market stall, a climbing shop, a repair café, an accounting collective that wanted a street door instead of a tower floor. None of them could have signed the old lease. All of them signed the new one.
One property manager, asked what changed, gave the answer that explains most of it: "The owners stopped pricing the space they used to have and started pricing the street they actually have." The street, for the first time in a while, is pricing up.
