Around March of 2020, everything changed for New Yorkers and the rest of the world. Even now, with the Covid-19 pandemic still lingering, many commercial businesses in NYC are tapping into new creative reserves to boost profitability. Although the worst of the pandemic appears to be over for New Yorkers, certain commercial real estate sectors still struggle to rebound.
The retail industry, in particular, is becoming more adept at thinking outside the box. As told in a recent news story, Barneys (yes, that Barneys) will play host to a Spirit Halloween pop-up shop over the holiday season. Similarly, Saks Fifth Avenue is partnering with WeWork to utilize the store's commercial real estate space to offer “Saksworks.”
Seasonal Partnerships and Sharing Square Footage
At first glance, these mashups seem almost unnatural, but they're ultimately a creative step in the evolution of NYC's commercial real estate industry. Even before the pandemic closed retailers' doors, online shopping had taken a considerable toll on brick-and-mortar cash flow. A strategy shift was unavoidable.
It seems at least one new strategy for commercial real estate investors who own big stores is renting out their square footage to successful seasonal pop-up shops, like Spirit Halloween. The nature of these partnerships lends itself to flexibility without requiring complete divestment. It's also sensible to divide up or share square footage and operate one or many businesses from the same commercial space simultaneously. As a result of e-commerce, there is an increased need for warehouse commercial real estate but a decreased need for large, in-person retail spaces. A middle ground has emerged in this transition, and we're now seeing a growing need for micro-retail.
Of course, hybrid approaches to seasonal partnerships and sharing commercial spaces won't be uncommon, either. Ultimately, investors will forge new territory, and NYC's commercial real estate market will evolve to fit the needs of the day.
Whether you're facing the difficult decision of waiting out the current market or selling, or you need an experienced foreclosure defense law firm, The Law Offices of Melvin Monachan are here to help. To schedule a consultation today, call us at (347) 389-1682. You can also contact us online.