Local Retailers are Calling for Space Again
May 06, 2010
With strong office leasing activity ending the first quarter of this year, we are now seeing some life with the retail-leasing sector as well. For over 18 months now, retailers have been struggling to stay alive with a number of both larger retailers and smaller independent firms closing stores, or demanding large rental concessions to continue business.
For the first time in a long time, our agents are getting local retailer calls interested in opening new stores. When people want to open bridal stores that is a very good sign - indeed. When you experience this long of a downturn, many people that have been out of work for a long time will consider opening their own retail business. During the 1991 great recession - it was the retail startup that began the recovery in the Bay Area retail sector. The same thing occurred in the doom and bust dot.com market of 2001. However, we are not only seeing startups, we are also seeing experienced local retailers seeking to expand. Many feel that a recovery is underway and many look at the empty institutional retail spaces as a chance to lock up better locations - which were not available to them when the economy was strong.
The institutional tenants - with the exception of the discounters - are still on the sidelines, but the strong regional retailer has the opportunity to grab a larger market share and they are starting to call their brokers again to expand.
Unfortunately for San Francisco, the retail rebound may have to wait. The 11-store rule, whereby retailers that have more than 11 stores must go through additional public review, has stymied interest in the city. Many neighborhoods are seeing multiple stores vacant and unlike the East Bay - where this recovery is happening - San Francisco retail spaces continue to have little interest. City Hall needs to wake up if it wants to join the party of this recovery when it comes to its retail storefronts.
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Written by: Hans Hansson
Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 25 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email email@example.com or call him at (415) 765-6897. You may also check out his website, http://www.commercialspacefinder.com/.