Is NYC going back to the old days?

Were you in Chicago?

Definite on the first two. The stats all back that up (crain's covers this every week, tons of vacant retail, and certain sectors down as much as 25% in business).

Crime stats have been mixed.
Though they only started the police cutbacks (they just skipped a class of new recruits).

I live off Madison and I don't think there is a block between 59th and 96th that doesn't have an empty store. A lot of things should go back to the old days... You can't destroy the wealth, and wealth creation potential, that we have and keep everything the same.

Have you people noticed how disgusting are the streets in Williamsburg along Bedbord Ave? It feels and smell like Chinatown after the Chinese New year! I admit the neighborhood has a cool vibe but paying $800/sq feet to live in Garbage land doesn't feel right to me!
What's even more revolting is that the N6th street stretch between Bedford and Kent that everyone is raving about is the smellier one!
Bottom line, this hood is way too over rated! Don't believe the hype!

I see plenty of empty stoes, but not restaurants. On Saturday night, almost every restaurant in Hell's Kitchen is PACKED. People are still eating out.

yeah, williamsburg is especially atrocious. but even areas like tribeca and soho don't seem as nice as they once were.

Some of you are such idiots.

Do you think closing retail and "deserted restaurants" are NYC specific phenomenons? If so, you're a dope. You do know that the *world* is in recession, right?

sledgehammer, those are the kinds of useless posts that will endear you to someone like rufus. Are Bedford and North 6th the most pristine streets in the city? Of course not, but they are way cleaner than you seem to imagine. The only really noticeable smells there are from the many restaurants in the area. Instead of baseless negative propaganda, maybe post something a bit more insightful?

There have been lots of retail closings throughout the city, but there have been plenty of openings as well - I don't think any of that is really so unexpected. These things happen all the time; they just might catch a bit more press during tougher economic times.

Retail rents are still insane. Landlords are very stubborn when it comes to ten year leases. They will sit for a while b4 they relent. If you think RE skyrocketed over the last few years...imagine what happened to retail rates. When there is three empty stores on every block that's when lndlords wake up.

"These things happen all the time; they just might catch a bit more press during tougher economic times."

I must respectfully disagree. I agree that media often exaggerates, but this situation is very real. Granted I live way uptown in Hudson Heights, but the increaing number of vacant retail sites is unbelievable. Walking up Broadway anywhere between 181st and 207th streets is almost eerie. There are entire blocks with no open retail/restaurants (which were all open when I first moved to the neighborhood a couple of years ago). I drive that route every day on my reverse commute to Westchester, and every week more places are closing up shop.
What is odd, there are a few places that have opened along that stretch recently, but they are all Pharmacies. I guess that is one of the few retail businesses that are less effected by an economic downturn...people need to buy medications regardless of the economy.
Even the "trendy" part of Hudson Heights is changing. The area along 181st, often called the local restaurant row, is affected. One cafe is currently trying to sell their business on craigslist, and some of the pricier restaurants are currently closed to soon reopen as a more budget-friendly version.

baseless negative propaganda?
I live in Williamsburg! I probably know more about this hood than you do! I'll keep fighting hard making sure people avoid getting burnt by spending a stupid amount of money in a neighborhood that doesn't give them any change back!

Easy sledgehammer, I live here as well. I just think you're clearly being sensationalist when you say things like "It feels and smell like Chinatown after the Chinese New year!" and "Garbageland." Some reasoned perspective would make you a bit more credible. I also don't know what you mean about "giving change back." Why do you live there if you're so unhappy with it?

wonder, didn't see that many empty retail spaces in london.

falco, in many places there ARE at least three empty retail spots per block. for a stunning wake up call, head to the flatiron. walk east to west, west to east, block by block, 22nd street down, 5th to 6th avenue. unless they've been on a rental tear in my absence, there are some blocks that are chilling, i think 17th and 20th are among the ones that stand out. and lower fifth keeps losing retail tenants as well, nine west just moved out, otto tootsi, etc. etc. etc.

aboutready, yeah, it's nuts in that area. To add to your international perspective, when I was in Paris in late May-early June, I hardly recall any empty retail spots. I'm pretty sure New York is being hit harder than a lot of other places. That said, I think it varies quite a bit by neighborhood. In some parts of town, I'm a bit surprised at how many places are popping up, presumably to take advantage in a down market. We'll see how many last.

bjw2103, i've noticed the new additions as well. some seem to be doing well. one place that we love that opened not that long ago in the east village has a chef/owner who was with Ducasse for some time. he told us his rent is so low now that he thinks five year survival is a given.

retail rents are a much different and more variable game than home rents. so much depends on when leases expire, when they began, whether landlords have already capitulated in a neighborhood. the flatiron district seems to be suffering from a sense of self-aggrandizement. the prime madison avenue retail seems to be suffering from the economic reality that certain retailers can no longer afford "trophy" locations. the UES seems to be benefitting from lower lease rates and probably an inclination of its residents to nest more,spend less and stay local. what will be interesting is this upcoming holiday season. if things haven't improved appreciably, i think high-end retail/restaurants may do quite poorly.

Why is New York so sensitive to downturns?

The moment the economy dips, New York is predicted to revert into trashy crime ridden cesspool but in civilized cities like Paris or London the city goes on as normal.

"Do you think closing retail and "deserted restaurants" are NYC specific phenomenons? If so, you're a dope. You do know that the *world* is in recession, right?"

Why is he a dope? You didn't know until we told you, either...

> I see plenty of empty stoes, but not restaurants.

Alpine, I know its tough for you to make it to Manhattan, so just pick up crains.

I'm not sure about the "stoes", but they regularly report on restaurant closings (orders of magnitude more than previous) and cutbacks at places that have seen 25% drops in revenue (which is pretty standard). Latest issue covered the whole Town closing (and guy's other place Country closed the main dining room) and talks about the industry stats.

If you don't see empty restaurants, then you aren't in Manhattan. But we knew that.

@BRABUS: "Why is New York so sensitive to downturns?
The moment the economy dips, New York is predicted to revert into trashy crime ridden cesspool but in civilized cities like Paris or London the city goes on as normal."

It's the US in general that is more "sensitive" to downturns and that's because it is a more capitalistic society than in Europe. In London and Paris, many more of the jobs that keep the city running (police, garbage collection, etc.) are government-sponsored and therefore more stable during a downturn, whereas in the U.S. they are financed by local taxes and therefore highly susceptible to market downturns. In Europe they don't downsize the police force when there is a recession (like they are about to do in NYC), just the opposite: the government is hiring more people as part of a stimulus package. I am not saying it is better or worse (lest somebody calls me a... gasp! "socialist"), but it is big difference between the two types of government/economy.

One thing which you will see is stores (especially restaurants) pulling the trigger on high rent retail, being open for 3 - 6 months, then closing. But this really ends up being worse than it sounds for retail landlords: if you are vacant for 3 months, give a 3 month credit for build out, collect rent for 3 months, evict for 3 months, pay brokerage fees, etc. you actually end up at the end of the year with like 80% reduced rent. And what happens is a shell game which the retail landlords play to their own detriment:

some fool way overpays for a spot on the block. now, the LL KNOWS he can get that much, so he holds out, but rents to the only person who comes along and is willing to pay the overpriced rent. Now there are TWO places on the block paying that kind of rent, so when the third one comes on, he KNOWS he can get that rent, too. this goes on for a bit. Then the first store folds because the rent was too high and it's vacant again. But in the interim, the LL has seen all the other stores still rent for that same amount. So he holds out till her gets it. When he does, while the new tenant is renovating, the second store folds. But the second LL just saw........... ad infinitum untill one or two wake up and realize they are better off taking less rent and having the stores stay open.

Has anyone noticed all the stores that are closed along Eighth Ave in Chelsea as well? Its an economic downtrun and historically New York enters recessions later than the rest of the country and stays in them longer. Thats the bad news. The good news is NYC always comes out of it. We're not going to have a monumental crime wave or 70's style recession. Relax everyone, it sucks but we're NY'ers we'll get through it, we always do!

My questions is: I think the single biggest growth area for retail in Manhattan (as far as number of locations) is bank branches. Seems to me this has exploded over the last few years. But a lot of these banks don't exist anymore: how many WaMu branches have opened in the last X number of years? Does Chase really need these branches in addition to their own? So what's going to happen to them?

If the answer is that they will be closed, I see big problems: it's bad enough that people are seeing vacant storefronts on every block. What will happen to consumer confidence when they see closed BANKS every other block?

Another thing: depending on the area, a lot of retail is in small buildings (like a 5 story walk up or 6 story loft, etc). For these buildings, the retail income is a very large portion of the rent for the entire building (I think the old rule of thumb was 40%). Well, a lot of these buildings changed hands over the past X years, and the transactions were done based on a certain income level. If the retail space goes vacant, and then can't rent for close to the prior rent, it's pretty easy for the building owner to be under water both in terms of value of the building vs his mortgage and not enough cash flow to pay. When this happens, you tend to see a LOT of these smaller buildings getting foreclosed on. It certainly happened the last time around.

interesting point about the bank branches. upper west side empty retail store fronts seem to grow by the week. morris bros. storefront has been empty for 2 yrs? amsterdam avenue losing restaurants. lamp store on amsterdam closes after 25 yrs.

It won't change until landlords begin to make adjustments with rents for commercial space. They are only harming themselves by holding out for ridiculous rents.

for sure...but as noted above, when you're talking about a ten year lease, you can see why they might want to roll the dice before dropping big time.

There are many retail stores closing on the upper west side. On Brodway from 70th to 90th street, I can count over a dozen stores that are closed or will be closing. It is scary to see so many stores gone which have been around for years. However, I still see people spending quite a bit and still eating out a lot. Are anyone cutting back on their spending habits like renting a summer house, eating at fine resturants, traveling and etc. From reading the above, it seems like a lot of people are still traveling and living it up, which is good because someone needs to drive this economy out of recession.

The apartment at 150 87th street had multiple bids and actually traded over the offering price, which i thought it was crazy. The apt is nice, but it was not that nice. You can tell the materials were slightly cheap and they were cutting corners where they can. What are your opinions 30yrs or aboutready?

AboutReady, Is the commerical RE that bad down by your area?

"Have you people noticed how disgusting are the streets in Williamsburg along Bedbord Ave?"

I hate to state the obvious -- but HELLO -- it's Williamsburg.

30yrs_RE_20_in_REO : This is a great point. It seems like you can't swing a stick without hitting a bank in parts of this town and now with the consolidation of brands, I have to imagine there will be a fair amount of redundancy suggested by high paid cost-cutting consultants.

RE: upper west side - what is the status of the Dublin House? Hopefully it will survive! Many fond memories there once upon a time....

30yrs_RE_20_in_REO: there was a great piece somewhere that took all the locations of every branch in Manhattan and predicted the number that would close based on block proximity and buy outs. It was a lot. I will try to find it and post it here.

sledgehammer- if you live there your thoughts are obviously more relevant. But you can't really blame bjw2103 for expecting you were just being another crazy person. There are so many here. Particularly when it comes to specific neighborhood discussions, there are a weird number of people who spend energy trashing places the don't live.

"You can't destroy the wealth, and wealth creation potential, that we have and keep everything the same."

Tell Obama and his tax advisors...

"On Saturday night, almost every restaurant in Hell's Kitchen is PACKED. People are still eating out."

I hear this all the time, but the problem is that last year these same restaurants were packed most nights of the week, and now it's just weekend business. Unless they recently signed a cheaper lease, that's not going to cut it.

the B&N chelsea branch has been vacant for ages. a couple of the mega-chain drugstores are on the bankruptcy watch lists (although they all deny any issues). a duane reade chapter 11 could leave some retail holes. there are a ton of unleased spots in new construction now.

RE_PRO, it seems to be getting pretty awful down here. i haven't spent much time recently in the west village, but the east village, flatiron, union square areas are fairly riddled with empty storefronts (the advertising they keep slapping up on the Domain empty space at b'way and 22nd could make you vomit, and then just west and south there are the faux storefronts, ouch).

In terms of spending, we're spending much less on things like clothes, more on travel (but overseas, so not much good for the local economy, sorry), and less on eating out. no real reason for the reduction, but i've found my inner cook again, and it seems prudent. we do make a point of not going to new restaurants much anymore, we visit the ones we love and hope they survive.

Century 21 dept. store in lower Manhattan is doing great business...they are building a huge new store in Queens. They do attract alot of foreigners, at this location, with their great discounts so that may be the reason.

" 'On Saturday night, almost every restaurant in Hell's Kitchen is PACKED. People are still eating out.'

I hear this all the time, but the problem is that last year these same restaurants were packed most nights of the week, and now it's just weekend business. Unless they recently signed a cheaper lease, that's not going to cut it."

I agree with this. But also I'll add that it USED to be that restaurants didn't need to be packed every night of the week to be profitable. They could close one day a week (usually Sunday or Monday), have 3 "slower" days, be busy Thursday Friday and Saturday, and do just fine. But at current rents, most places have to be packed EVERY night to survive. And i also think that seeing Hell's kitchen restaurants packed is not a great market indicator: in general, they are both cheaper and in an area which is a new hot spot for "younger" people who are much more likely to be "out" on weekends every weekend, every night.

Try taking a tour of "established" middle end restaurants on Tuesday night at 9PM and see what you find. There are a lot of places which have been around for years which aren't resigning leases (typical example: Village on 9th St, and while we're on 9th Street take a look at Cru, which is a "top" spot on Teusday at 9 - 10PM).

Everything is fine.

"The apartment at 150 87th street had multiple bids and actually traded over the offering price, which i thought it was crazy. The apt is nice, but it was not that nice. You can tell the materials were slightly cheap and they were cutting corners where they can. What are your opinions 30yrs or aboutready?"

please link.

There are some GREAT things about this downturn. Landlords will HAVE to lower their rents to attract tenants and we can have some wonderful new restaurants that do not cost $20/entree. Prices on housing are falling fast so creative types will move back to the city. Looking forward to what NYC will become.

How can banks possibly make money off of all thier retail branches? I rarely go inside anymore, doing all my banking online. They usually seem empty and there are so many more than 10 years ago.
Is opening a branch on every block a way to market themselves as being a market leader? Are they actually making any money with these branches?

Hudson Street between Leroy and Bethune has about two empty storefronts every block. I went for a slice of pizze last month and the first two places I tried were both closed down.

Last night (Thursday) at a top 5 NYC restaurant, tables were about 80% full at prime time. Its not going under but nobody's putting money into new high end places right now. Better off investing in smuckers and skippy.

Damn banks. Not only did they drive up rents but they kill foot traffic for other vendors. Some places tried to put a zoning cap on them for those reasons.

right now some banks have too many branches as a result of their mergers and acquisitions. Chase/ WaMu is a prime example. Over the coming weeks and months, I would expect to see any former WaMus that are in close proximity to Chase branches shut down.

Props to the Zabar family, who turned down a bank that wanted to rent one of the storefronts they own in the 80s on Broadway.

Regarding 150 West 87th (http://www.streeteasy.com/nyc/sale/351369-coop-150-west-87th-st-upper-west-side-new-york) there were some extenuating circumstances there, the most important of which is that the price had been cut 25% because SoNY was in fire-sale mode. As liquidpaper says when he knows more about a sale than he can share, it was a deal that made sense for both sides.

"Try taking a tour of "established" middle end restaurants on Tuesday night at 9PM and see what you find. There are a lot of places which have been around for years which aren't resigning leases (typical example: Village on 9th St, and while we're on 9th Street take a look at Cru, which is a "top" spot on Teusday at 9 - 10PM). "

Again, Crain's reports this stuff weekly. Blows my mind how many familiar names are getting it... Town, Country, Payard (possibly)... (not a minivan).

Interestingly, some micro-hoods buck the trend proving that prime locations can indeed be more insulated (I'm not saying immune) and able to weather bad times. At University and 8th Street, for example, in the central Village, two huge spaces were recently vacant: one a former Joyce Something womens clothing store and across the street a former BBQ place.

However, a Capital One opening in the BBW space last week, and a CVS is going into the old clothing store's space.

Who knows for sure, but between NYU, the renovated Washington Sq. Park, the relative wealth of many in the area, and the lack of new construction, the area feels quite stable, safe, and clean.

RE CRIME: As for the silly comments about crime above, the city continues to see decreases across all crime categories city-wide. In the microcosms of individual precincts, some crime categories are already so low (say 0-4 incidents a year, for example) that even one more appears as a 25% increase which paints a very distorted picture if taken alone without a look at the raw numbers. In the Village, the NYPD decision to provide officers for a park safety detail (instead of taking up community offers of paying off-duty cops to serve as a private security force) will no doubt continue to benefit the central Village area. The NYPD commitment to the area is also shown with the investment in a new Mobile Command Post on the south side of Wash Sq Park replacing the old one that had been there for 5+ years and was getting a bit worn.

Interesting. If Capital One opened last week, when do you think they signed the lease?

My guess is that more chains have the funds to go forward and chains don't fit in the tiny storefronts on Hudson Street (other than clothing boutiques).

I am with anon3. People like to pretend that expecting 1990s-style affordability is wishing for 1970s-style crime and filth. Give it up. 2004-2007 was a credit-fueled anomaly. Right, you shouldn't need to pack a restaurant 7 nights a week to pay the rent and earn a living. I wonder what historians will eventually call this boomlet.

denial

30yrs, {http://www.streeteasy.com/nyc/sale/351369-coop-150-west-87th-st-upper-west-side-new-york}
Same hyperlink as west81st

"when do you think they signed the lease?"

It's taken them forever to renovate that space. I think the deal was inked like almost 2 years ago.

Kyle:

take a look at the vacancy/turnover rate on 8th Street, which has it's own BID and has been somewhat of teh belleweather for Village high volume retail for decades (remember when it was "The Shoe District"?).

"How can banks possibly make money off of all thier retail branches?"

I think a lot of banks started looking at Manhattan branches as if they were billboards, similarly to the way some companies used to think of Madison Avenue and 57th Street (I don't mean the corner of Mad and 57th, I mean the two separate streets)

"but the east village, flatiron, union square areas are fairly riddled with empty storefronts "

I almost shit my pants a couple of months ago when I saw someone opened a fucking boutique olive oil store almost on Avenue A.

"However, a Capital One opening in the BBW space last week, and a CVS is going into the old clothing store's space. "

And the Metro Drugs which has been next door for years is closing just in time for them to be opening. Talk about being "category killed".

30yrs when do you think they signed the lease?"

It's taken them forever to renovate that space. I think the deal was inked like almost 2 years ago.

Are you refering to apt 7c on 150 w 87th street?

"but the east village, flatiron, union square areas are fairly riddled with empty storefronts "

I almost shit my pants a couple of months ago when I saw someone opened a fucking boutique olive oil store almost on Avenue A.

30yrs, you are funny man..

AboutReady, we have cut back a little not much. Truthfully, we should cut back more, because I do feel that the economy and banks will get worst over the next few years. I think most of us have been a little spoiled over the last ten years, and It is diffcult to break that habit.

"30yrs when do you think they signed the lease?"

It's taken them forever to renovate that space. I think the deal was inked like almost 2 years ago.

Are you refering to apt 7c on 150 w 87th street?"

I'm talking about the Capital One bank on the NorthEast corner of University and 8th St. I believe they (Dallas BBQ, although I don't think this one ever used the Dallas moniker))closed late Summer of 2007 and that either the deal had already been inked or it was VERY shortly afterwords.

For the record, Retail banks ruined 'retail Manhattan'.
They came to town fighting for spaces and bidding against one another for locations. This greatly skewed the per sq/ft price through the roof. It also gave hungry landlord the green light to charge everyone like they were a retail bank drunk on fast easy 'funny money'. So now the party is over and we will see shrinkage but, there will be a lag time to allow greedy landlords to return to reality. This lag could take 2-5 years depending on a multitude of factors. Prepare to see many empty retail locations for ears to come. The Second ave subway is a fine example. You would think that retail location owners would evaluate the situation and work with there tenents to eweather the storm. Not so. Most landlords that I am aware of have told their tenents to suck an egg and I'll see you in court.
It's gonna take time and pain to close the gap caused by MORON GREEDY RETAIL BANKING. They may be our neighbors, friends and, spouses but, they screwed our town.

What? You don't like that Sixth Avenue is essentially one long Chase branch?

Essentially Chelsea will be hurt the most in Manhattan because of the unstable demographic and the purchsing power that inflated the area will decline rapidly, plus they had the biggest runup.