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Old 06-01-2017, 08:40 PM   #1
stellarfun
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The rise and fall of Bleecker St

Luxury blightscape.

https://www.nytimes.com/2017/05/31/f...av=MostEmailed
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Old 06-02-2017, 10:01 AM   #2
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Re: The rise and fall of Bleecker St

I wonder if a similar lesson could be learned from Newbury St.? Newbury is a more prominent shopping street and it hasn't seen the "blight" Bleeker has, but it also hasn't fared as well as other parts of the city - particularly with restaurants - in a time when it seems retail and restaurants are popping up left and right around town. Rents are prohibitive and other areas are becoming more appealing (like Downtown Crossing, the Seaport, Kendall, etc.).
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Old 06-02-2017, 10:10 AM   #3
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Re: The rise and fall of Bleecker St

Quote:
Originally Posted by Lrfox View Post
I wonder if a similar lesson could be learned from Newbury St.? Newbury is a more prominent shopping street and it hasn't seen the "blight" Bleeker has, but it also hasn't fared as well as other parts of the city - particularly with restaurants - in a time when it seems retail and restaurants are popping up left and right around town. Rents are prohibitive and other areas are becoming more appealing (like Downtown Crossing, the Seaport, Kendall, etc.).
The Neighborhood Association of the Back Bay actively prevents restaurants from opening on Newbury. There's an unwritten rule that no new restaurants shall be allowed to open on the "sunny side" of the street. [Globe]
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Old 06-02-2017, 10:23 AM   #4
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Re: The rise and fall of Bleecker St

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The Neighborhood Association of the Back Bay actively prevents restaurants from opening on Newbury. There's an unwritten rule that no new restaurants shall be allowed to open on the "sunny side" of the street. [Globe]
Jesus.
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Old 06-02-2017, 11:40 AM   #5
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Re: The rise and fall of Bleecker St

From a restraint owner, "“The rent I paid on 10,000 square feet [at the Park Plaza] was the rent I was going to pay on 3,500 square feet” on Newbury, he recalled."

When landlords get their rents to a certain pricepoint, they are loath to cut them. If they cut the rent for new tenant x, then existing tenant y will want his rent cut too,

And as for restaurants, the French Laundry recently spent $10+ million for a new kitchen, for a restaurant seating 60. (The chef owns the building, so rents aren't a problem) Readily conceded, that cost is an outlier, but still rents become a big factor when one has a big up-front cost in equipment and decor.

This site said that Newbury St had an average rent of $225 per square foot in 2015.
https://www.buxtonco.com/blog/top-10...retail-streets

How many meals at what price would a chef need to serve to afford those rents?
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Old 06-02-2017, 11:47 AM   #6
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Re: The rise and fall of Bleecker St

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Originally Posted by stellarfun View Post
From a restraint owner, "“The rent I paid on 10,000 square feet [at the Park Plaza] was the rent I was going to pay on 3,500 square feet” on Newbury, he recalled."

When landlords get their rents to a certain pricepoint, they are loath to cut them. If they cut the rent for new tenant x, then existing tenant y will want his rent cut too,

And as for restaurants, the French Laundry recently spent $10+ million for a new kitchen, for a restaurant seating 60. (The chef owns the building, so rents aren't a problem) Readily conceded, that cost is an outlier, but still rents become a big factor when one has a big up-front cost in equipment and decor.

This site said that Newbury St had an average rent of $225 per square foot in 2015.
https://www.buxtonco.com/blog/top-10...retail-streets

How many meals at what price would a chef need to serve to afford those rents?
My parents used to rent restaurant space. You are accurate about the desire not to cut rents. But the way to deal with this is to negotiate a lease that includes offsets for money the tenant is putting into the space: for example - free or discounted rent for X months coinciding with the tenant investing in the kitchen or investing in other upgrades that improve the space.

This is a win-win because it lowers the barrier to entry for the tenant, sometimes results in enduring improvements to the space, without changing the baseline "advertised" rent for the space.

Many restaurant landlords are hesitant to do this, and take a hardline stance awaiting the ideal tenant who bears all the upfront cost and pays full rent...however, that's a gamble because you can easily lose several month's or a year's rent holding out.

Being a restaurant landlord is particularly tricky, and involves creative dealmaking much more so than other retail space.
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