Because of Recession, Retail Tenant Landlords Now Extend Their Own Discounts

In the mid-nineties, there was a stretch on the Ludlow Street located in Manhattan that was dominated by a lot of boarded up windows as well as wholesale fruits and vendors of nuts. There was a Terri Gillis’ boutique too, which was the magnets that could draw in shoppers in the area of the Lower East Side. This area is, at the moment, the liveliest night strips of the city – so it is very painful for Terri Gillis to get an eviction note the previous months because she had owed a startling thirteen thousand five hundred fifty six and twenty six cents in back taxes of real estate.

However, her landlord had a sudden change of heart and had then offered to let Gillis stay in the building for another two years. She even went as far as to propose being the one to pay for a part of her real estate future taxes (which is normally paid by the retail tenants themselves). As shocking as it may seem, such a move by most managers have decided that it would rather go through that sacrifice in order to hold on to a good thing and not let it go.

Trying Out Other Options Like Compromise

As of late, many people are now trying to compromise in order to survive. In this light, the landlord has got his own incentive to keep his cash flowing. And this move is echoed by many landlords across the country. Over a year ago, some owners of the most coveted spaces in New York for retail and restaurants had the power to actually dictate their terms of leases. But because recession has changed all of that and has brought about a really rapid rate of rising vacancy as well as bankruptcy, it is now very hard to find some new tenants. And because of this, most small businesses have begun finding their own silver lining in these tough recessionary clouds – they have finally begun leveraging with their landlords.

For instance, some six months ago the landlord of the pub Holland Bar located in Hell’s Kitchen has terminated the lease because he thought he would be able to find a tenant who would pay a much higher rate than the previous one. He was wrong. When he realized that there were no takers, he offered this space back to the original lessee who was able to reopen the week before. Faith Hope Consolo, who is the current chairwoman of the retail leasing and sales working for Prudential Douglas Elliman, says that everyone is very afraid to lose their revenue stream. Consolo also represents the retailers and the landlords who work on six lease renewals. There were at least two landlords who had feared losing tenants so they agreed to cut rent to around ten more percentages.
 “Everyone is afraid of losing revenue stream,” said Faith Hope Consolo, the chairwoman of retail leasing and sales for Prudential Douglas Elliman, who is representing retailers and landlords on six lease renewals. At least two of the landlords have been fearful enough about losing tenants that they agreed to rent cuts of more than 10 percent.