A Slow-Rising Tide
A reliable report states what is pretty obvious to anyone who frequents New York's commercial districts: storefront retailers still face severe pandemic aftershocks. Urban workers and commuters haven't yet returned to Manhattan and other commercial districts in pre-pandemic numbers. While in some cases off their lifeline, storefront retail sales still haven't stabilized at survivable levels. The tide of retail sales rises, but slower than retailers had hoped. And so the question remains just how many surviving retailers that slow-rising tide will finally lift.
Landlords Share Retailers' Pain
Retail recessions are nothing new. Recessions can even have a healthy way of shaking the dust off a moldering economy. In a recession, retailers slim down, reinvent, and refocus, often coming out stronger for it. In a recession, landlords collect rent. Or landlords find new tenants who know recessions often end with a sales bang and who want to be ready for it.
But the pandemic hasn't been just another economic recession. It has been more like a whole new way of life. And in the pandemic's case, when the retailers suffered as deeply as they did, their landlords very often suffered right along with them. For many commercial landlords, the pandemic has differed markedly from recessions. Through the pandemic, landlords have often shared more, and in some cases much more, of the pain. The above story confirms that extended rent relief for storefront retail tenants puts commercial landlords under ever-greater pressure. When the Empire State Building can't fill even half its retail space, you know landlords, too, are suffering.
Getting from Here to There
So what, in this extended pandemic, is next for storefront retailers and their landlords? New York City's storefront commercial districts aren't going to simply disappear. The City is far too large, vital, strategic, and attractive to collapse. The City has weathered depressions, world and civil wars, and, yes, even pandemics before. Wise retailers and landlords know that storefront sales will return to healthy levels, even if they do so in new configurations, connected like everything else to e-commerce.
If expecting storefront retail's healthy return is the wiser case, then how do retailers and their landlords get from here to there--from hanging on to thriving? The answer may be the same way they have when under other economic stresses. Depending on the individual circumstances, tenants' tried and true tools may include rent relief or forgiveness, lease modifications, lease sharing, subleases, relinquishing space, converting space, or even purchase options or lease extensions. For landlords, the tools may include incubator spaces, new mortgages, current debt relief, or property conversions or sales.
Getting Expert Help
The point is that legal and financial tools exist to achieve interim objectives toward realizing both the retailer's and landlord's goals. Now, late in the easing pandemic, isn't the time to throw one's hands in the air in despair. If you need expert help identifying your New York City real estate goals, and executing the plans to achieve them, consult New York/New Jersey real estate lawyer Melvin Monachan. Melvin Monachan helps residential and commercial clients adopt sound foreclosure defense and eviction strategies to achieve personal, financial, and business goals. Melvin Monachan also assists with closings on New York and New Jersey real property. Call (347) 389-1682 or go online for an appointment with the industry-focused, relationship-driven Law Offices of Melvin Monachan, PLLC.
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