Sunday, February 1, 2009

Recession causing retail landlords to be sort of nice and humane

To the Times!

Back in the mid-1990s, when a stretch of Ludlow Street in Manhattan was dominated by boarded-up buildings and wholesale fruit and nut vendors, Terri Gillis’s boutique, TG-170, was one of the magnets that drew intrepid shoppers to the Lower East Side.

That area is now one of the city’s liveliest late-night strips, which made it particularly painful for Ms. Gillis to receive an eviction notice last month because she owed $13,556.26 in back real estate taxes. But in a sudden change of heart, her landlord recently offered to let Ms. Gillis stay for two more years, and even proposed paying part of her future real estate taxes — which retail tenants normally pay.

In this troubled economy, the building manager, Arwen Properties, decided it would rather hold onto a good tenant.

“We’re working with her and trying to compromise,” the lawyer for Arwen Properties, Joel Bernstein, said. “The landlord has got an incentive, naturally, to keep cash flowing.”

Many landlords he advises are coming to the same conclusion, Mr. Bernstein said. Just a year ago, the owners of New York’s most coveted retail and restaurant spaces held almost unassailable power to dictate the terms of their leases. But the recession is changing that equation, as rapidly rising vacancy rates and bankruptcies are making it hard to find new tenants.


Ess G said...

regardless as to whether it's recession driven or not, this is the type of story we need more of

EV Grieve said...

Agreed, Ess G!