Quote:
Originally Posted by mhays
Nothing in the article differs from my post in a quick read, except for some opinion from an urban thinker who's not in commercial real estate.
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Well it points out that it’s things like nail and hair salons that have survived, not because they’re low-margin (of course), but because one needs to be physically present to purchase their services. You can’t buy a haircut on the Internet (well you can, but you still have to show up for it).
It also discusses the fact that while pop-ups and “interesting creative businesses” (as you call them) could be a solution, the problem is that landlords avoid signing short-term leases with them and instead hold out for a deep pocketed tenant like a bank (which is exactly the sort of thing that should go online, but I disgress).
You also mention “spreading out” the typical store to have lower sales per square foot, which absolutely, unequivocally, without a doubt would require lower rent per square foot to work economically.
So no, it’s really more a matter of reducing rents than anything else. It’s also about reserving retail space for retail uses (which maintains supply and helps to achieve the former).
And where the link to the London article comes in is that it’s also necessary to encourage those short-term uses (“meanwhile uses” in the London article), which could be done through a combination of carrots and sticks. The stick could be tax on vacant space. The carrot could be more rights for landlords and fewer tenant protections, so that a landlord could sign a short-term lease with a pop-up or creative project and not worry that they are now stuck with that tenant long-term. Like hiring and firing employees, if you make it impossible to terminate the relationship, it will in many cases not be formed in the first place.
(Btw, I have plenty of experience with real estate to have views on this, both on the tenant and landlord side.)