Although many businesses held on through the pandemic and adjusted their offerings to better fit a drastically changed world, others were forced to close their doors and give up their shop spaces. Even big chains, that laid claim to some of the most highly-trafficked and lucrative locations in the country, made the decision to close up as customers stayed home and hunkered down. But as a growing number of Americans are getting their Covid-19 vaccinations and getting back out, businesses are ready to regroup, reopen, and welcome them, and in some very unexpected, highly desirable places.
A Major Price Drop On Desirable Storefronts
Storefronts and restaurants in Midtown Manhattan are considered premium in terms of business real-estate. That changed last year when workers left their offices to go remote and tourists put their travel plans on hold. This amounted to a major drop in real estate, with the costs of leases and lease renewals dropping by nearly 60 percent. The significant decreases opened the door to smaller business owners and independent entrepreneurs who could previously only dream about setting up shop in such desirable locations.
Small businesses that were left with little choice but to shut down, reevaluate, and make a new plan were in a unique position to turn a crisis into an opportunity, provided they were poised to make a move. Under normal circumstances, bids on premium retail spaces are obviously quite competitive and therefore only realistically open to big names with bigger resources. The impact on the pandemic and subsequent drop in rents created a gap in this highly competitive market, which some entrepreneurs were ready to seize upon and are now in a favorable position as lockdown measures are relaxed.
A Valuable But Shrinking Opportunity
However, this valuable opportunity is shrinking. According to real estate firm CBRE’s associate director of research, Mike Slattery, the number of tenants placing bids on these reduced-cost, premium market business spaces has been increasing steadily, which should not come as a surprise in Manhattan. Per Slattery, “The flow of tenants back into the market has actually started to spark bidding wars.”
Do you think these small business owners are making a smart move by breaking into these spaces at this time? Comment and share your thoughts.
CBRE Group, Inc. is the world’s largest commercial real estate services and investment firm, with 2020 revenues of $23.8 billion and more than 100,000 employees (excluding affiliate offices). CBRE has been included on the Fortune 500 since 2008, ranking #122 in 2021. It also has been voted the industry’s top brand by the Lipsey Company for 20 consecutive years, and has been named one of Fortune’s “Most Admired Companies” for nine years in a row, including being ranked number one in the real estate sector in 2021, for the third consecutive year. Its shares trade on the New York Stock Exchange under the symbol “CBRE.”
CBRE offers a range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.