Retail Chains Abandon Manhattan: ‘It’s Unsustainable’

[maru2501]

Wondering how this is being felt there. Really starting to fear conditions in big cities are forever changed.
Chicago struggling with this also, plus our nagging looting problem

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Some national chains, both retail and restaurants, are closing outlets in New York City, which are struggling more than their branches elsewhere.

https://www.nytimes.com/2020/08/11/n...in-stores.html

[iheartthed]

The chains are for the tourists. If the tourists aren't here then the chains won't be either. As soon as the pandemic is over chains will want to be in Manhattan again.

[maru2501]

seems one issue is that chains have long been replacing the home-growns, potentially now leaving holes in the retail fabric.

mom-and-pops and restaurant startups are being pushed further into the neigbhorhoods, just like Chi..

but like I said, we seem to have a bigger problem with businesses now weighing the cost of staying also against looting

[iheartthed]

Originally Posted by maru2501

seems one issue is that chains have long been replacing the home-growns, potentially now leaving holes in the retail fabric.

mom-and-pops and restaurant startups are being pushed further into the neigbhorhoods, just like Chi..

but like I said, we seem to have a bigger problem with businesses now weighing the cost of staying also against looting

Looting might be an issue in Chicago, but isn't in NYC. But the biggest problem for all retailers is lack of shoppers. That's why so many are either in bankruptcy, or are close to it.

[maru2501]

Originally Posted by iheartthed

Looting might be an issue in Chicago, but isn't in NYC. But the biggest problem for all retailers is lack of shoppers. That's why so many are either in bankruptcy, or are close to it.

Right. NYC had looting initially but hasn't seen it return

I think long term COVID is the bigger deal. Also because so many companies are probably going to forever reduce the number of workers they pull into central office locations. They now have the chance to reduce rented space and overhead, now that they have seen they can still run their businesses with so many remote workers. That will trickle down again to retail

[the urban politician]

That's the advantage of Manhattan being an island. Very hard for looters to get in en masse.

Bottom line is, whether it's looting, foot traffic, or both--COVID is by far the underlying cause.

Once COVID lockdowns are over, I think we will see things return to normal again, although it may take another full year.

I also think that this will sort of be like a Noah's Ark of commercial real estate. A way for fresh new businesses to have a crack at some of the prime locations. Rents will still be well below their peak, and we will see new names, new restaurants, etc.

Lets try to be optimistic!

[iheartthed]

Originally Posted by maru2501

Right. NYC had looting initially but hasn't seen it return

I think long term COVID is the bigger deal. Also because so many companies are probably going to forever reduce the number of workers they pull into central office locations. They now have the chance to reduce rented space and overhead, now that they have seen they can still run their businesses with so many remote workers. That will trickle down again to retail

Chain brick and mortar retail was already in trouble before 2020. The pandemic just put the final nail in the coffin for a lot of these companies. I think the post-pandemic landscape for retailers that survive will be a hybrid of storefronts in high profile locations and a strong online component. Most chain retailers will adopt some variation of the Bonobos model, where the physical location is a showroom, and most transactions take place online.

[mrnyc]

Originally Posted by the urban politician

That's the advantage of Manhattan being an island. Very hard for looters to get in en masse.

Bottom line is, whether it's looting, foot traffic, or both--COVID is by far the underlying cause.

Once COVID lockdowns are over, I think we will see things return to normal again, although it may take another full year.

I also think that this will sort of be like a Noah's Ark of commercial real estate. A way for fresh new businesses to have a crack at some of the prime locations. Rents will still be well below their peak, and we will see new names, new restaurants, etc.

Lets try to be optimistic!

^ oh geez i sure hope you are right. time will tell and it depends on how the corona cure goes i guess.

[destroycreate]

Just thinking about the future of NYC gives me so much anxiety lately. It seems like people are deserting it by the droves, and with so many companies going remote, I worry about how all of those thriving ecosystems of commerce (food vendors, food courts, adjacent retail) will survive this.

[iheartthed]

Originally Posted by destroycreate

Just thinking about the future of NYC gives me so much anxiety lately. It seems like people are deserting it by the droves, and with so many companies going remote, I worry about how all of those thriving ecosystems of commerce (food vendors, food courts, adjacent retail) will survive this.

NYC is really the last place any of us should be worried about.

[Crawford]

Originally Posted by iheartthed

Looting might be an issue in Chicago, but isn't in NYC. But the biggest problem for all retailers is lack of shoppers. That's why so many are either in bankruptcy, or are close to it.

The issue from the article is really a Midtown Covid thing. Midtown retail is almost all tourist and office worker driven, and obviously those potential shoppers are near-zero. Plus Midtown has the highest retail rents on earth, so unless your landlord is willing to negotiate, you're out of luck until there's a vaccine. You need incredible foot traffic to make $1000/ft rents work, and right now you probably have 10% of your normal traffic.

The longer-term issues facing retail aren't really Covid-related, and those speak to some of the national bankruptcies.

Neighborhood retail seems pretty normal, however, because not dependent on office workers or tourists. Target has announced three new stores on the UWS alone, including two in the past few weeks. Also announced two new downtown BK stores on top of the existing two.

But those are for locals. No way will Midtown retail rebound until there's a vaccine.

[Acajack]

Originally Posted by iheartthed

Chain brick and mortar retail was already in trouble before 2020. The pandemic just put the final nail in the coffin for a lot of these companies. I think the post-pandemic landscape for retailers that survive will be a hybrid of storefronts in high profile locations and a strong online component. Most chain retailers will adopt some variation of the Bonobos model, where the physical location is a showroom, and most transactions take place online.

I think once things return to normal (at least somewhat), Manhattan will still be one of the best places in the world for those showroom-type stores.

But will they need as much space as the traditional stores used to occupy?

And the same question applies to office space. How much demand for space will there be out there, relative to what there was before?

[iheartthed]

Originally Posted by Acajack

I think once things return to normal (at least somewhat), Manhattan will still be one of the best places in the world for those showroom-type stores.

But will they need as much space as the traditional stores used to occupy?

And the same question applies to office space. How much demand for space will there be out there, relative to what there was before?

I got the sense that prime retail space in Manhattan already worked as a showroom, so I don't expect much to change. I doubt many of these stores in very high traffic locations have been extremely profitable. Their purpose has mostly been visibility.

[Crawford]

The retail rents in Times Square are so insane that they effectively operate as global advertising platforms. But, again, they need the tourist hordes back, which obviously won't happen till 2021 at the earliest.

I think Midtown office workers will return sooner. Once there's a vaccine, the offices will be full. Our firm returns as soon as vaccine is distributed. Tourism will take a couple of years to fully recover, especially because global economy will be crap.

[dc_denizen]

bring back the mom and pops.

landlords can live with less money. capital can live with lower returns

[JManc]

COVID set the stage up for this:

[Acajack]

Originally Posted by JManc

COVID set the stage up for this:

Snake Plisskin? I thought you were dead!

[bnk]

Originally Posted by maru2501

Right. NYC had looting initially but hasn't seen it return

I think long term COVID is the bigger deal. Also because so many companies are probably going to forever reduce the number of workers they pull into central office locations. They now have the chance to reduce rented space and overhead, now that they have seen they can still run their businesses with so many remote workers. That will trickle down again to retail

Already happening.

https://theusawire.com/2020/08/26675...ckKDwvHUtkskQs

Chicago Alderman says businesses leaving Magnificent Mile

American Wire ^ | August 13, 2020 | Josh Wilson

Chicago’s famous Magnificent Mile, a major shopping district in the city’s downtown, may be losing some of its longtime tenants. Chicago Alderman Raymond Lopez said the situation in Chicago is pretty sad at this point.
“We’re seeing a lot of the same mistakes from the end of May being re-performed again following this past weekend’s looting,” Lopez said.
Lopez says that downtown Chicago has always been a major hub for business and a frequent place to visit by tourists. Now he fears that might no longer be the case.
“The fear is spreading, the anxiety is spreading and we’re seeing individuals who used to see the downtown areas, like the crown jewel of our city, now wanting to leave, people who live there wanting to re-evaluate their choice in housing options and stores who were just starting to get past the main riots and looting thinking that they may not stay on the Magnificent Mile anymore,” he said.
Chicago has been front and center during the nationwide protests and riots. President Donald Trump has been a vocal critic of the city’s leadership for failing to control crime. On Sunday, downtown Chicago was overrun by looters with many high-end retailers being vandalized.
Chicago Police Superintendent David Brown held a press conference earlier this week to address the situation.
“Criminals took to the streets with a confidence that there would be no consequences for their actions and I, for one, refuse to allow these cowardly acts to hold our city hostage,” Brown said. “CPD will not stand by as our beautiful downtown becomes someplace that people fear.”
Lopez says that a number of elected officials want repercussions and accountability but they are outnumbered by leaders like Mayor Lori Lightfoot.
“The problem is that our law enforcement, our mayor, and our state’s attorney have not been on the same page when it comes to the adjudication of justice in Chicago,” Lopez said. “The fact that State’s Attorney Kim Foxx is delusional in thinking that criminals who see no repercussions will be stopped simply because an activity is illegal shows how out of touch she is.”
Even the Ronald McDonald House wasn’t safe from the looters on Sunday.

“SAD & UNACCEPTABLE: The Ronald McDonald House in Chicago was vandalized during looting early Monday morning while families & their sick children huddled inside. The liberal mayor must control her streets,” tweeted White House press secretary Kayleigh McEnany.

...

[iheartthed]

Originally Posted by bnk

The liberal mayor must control her streets,” tweeted White House press secretary Kayleigh McEnany.

...

It was unthinkable that retailers would be ditching the Mag Mile when Obama was president. But here we are...

[maru2501]

I do hope that when things level out, lower rents could result.. I agree someone will always take a flier

problem becomes when giant RE holding firms are willing to sit on properties for years

Most of N Michigan Ave also functioned more as advertisements you can walk into. Many of them lost money, but tourists would go home and buy something from the same store at their local mall or online

Security costs start to factor though. Bulletproof glass and anti-vehicle stuff can be unsightly

there are nice stores in some captial cities in the developing world but they have very visible armed sercurity. Not sure we want that either