Smaller and Local Tenants Kick Tires for Competitive Retail Space
Small and local retail tenants are starting to kick tires as they become attractive to landlords who were once interested in leasing to national tenants.
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NEW YORK CITY – Small and local retail tenants are starting to kick tires as they become attractive to landlords who were once interested in leasing to national tenants. Rather than deal with corporate hurdles to get a large retailer in-house, they’re looking at retailers on their third or sixth store, Hal Shapiro, senior director at Winick Realty Group, tells GlobeSt.com.
The trend is one attendees are paying attention to at the International Council of Shopping Centers Deal Making Conference in New York City from Dec. 10th to the 12th.
As the economy enters a slower market in the current late recovery stage, retail landlords have become more amendable in renting to various tenants. And some landlords are under strict loan repayments on highly leveraged buildings and want to fill vacancies right away, according to Shapiro. “Rather than keeping space on the market, having a tenant is better than not having a tenant,” he said. “They’ll find ways to get those spaces filled.”
To accommodate smaller tenants, landlords will break up larger spaces ranging from 8,000 to 15,000 square feet and divide them into 3,000 to 5,000-square-foot spaces and even smaller depending on the location, Shapiro said.
Retail landlords are also pondering what will happen in the New York retail landscape if the recent laws city council introduced regulating commercial retail rents are enacted, which GlobeSt.com recently reported on.
The recently introduced legislation has real estate owners shaken up, according to Shapiro. “They are afraid the new laws will come into effect and will keep them from making profits,” he said. “They don’t know what it will be, so they can’t adjust accordingly.”