In our last post, we highlighted the potential opportunities for retail clients, as building owners are becoming more amenable to building out spaces to suit particular clients. As we delve further into this topic, we are finding that there are a number of areas in and around Manhattan that are experiencing rapid development, but are lacking in retail services.
According to a recent GlobeSt.com report, this phenomenon is likely because large sections of space formerly zoned for industrial use are now being used for residences and commercial activity. As such, these areas, particularly in Long Island and the Bronx, are in need of retail outlets given the lack of street traffic.
For those entities that are considering such spaces, the old adage from the movie “Field of Dreams” may apply here: “If you build it, they will come.” For residential developers seeking space, having a retailer as a ground floor anchor would provide a benefit for potential homeowners and renters, since they would not have to travel far to meet some of their basic needs (e.g. grocery shopping).
Additionally, activation of ground floor space is essential for the success of a retail tenant. As we noted how street traffic is lacking in some developing areas, retailers may depend on this in order to survive. For many retailers, simply having a visible presence should suffice, and once the traffic grows, the interests all entities will be satisfied.
While this is the ideal scenario, ideals and business do not always go as planned. Because of this, it is prudent to have an experienced real estate attorney negotiate the terms of a build out deal.