According to a recent NY Post media article, retail leasing here in NYC may have reached a “turning point” since the start of the COVID-19 pandemic. The NY Post cites a recent report by CBRE, highlighting two critical metrics indicative of an improving retail leasing environment in New York City. The first is a 2.2% rise in the average asking rent in the 4Q 2022 over the previous quarter. This is the first 4Q rise since 2016 and is deemed by real estate and leasing professionals as “a significant barometer of landlord confidence.” The second metric, as reported by the NY Post, is a 5% decline in direct-lease ground-floor availabilities in sixteen “prime corridors” tracked by CBRE. According to the NY Post, the retail leasing market is being buoyed by three factors: more tourism, live entertainment, workers returning to offices. Generally, these factors lead to more foot traffic in retail corridors, which translates to more sales and higher demand for ground rental space.
We at Wright Law Firm NYC are experienced New York City commercial lease and real estate attorneys. We’ve seen turning points like this before, and we can offer a few pro tips for commercial retail leasing. Contact our office by e-mail or call us at (212) 619-1500 to schedule a consultation.
Keep an Eye on the Market
The first pro tip is the act now. That may not mean changing your retail lease space or signing a new commercial lease. But surely it means you should start evaluating options and looking if you are in the market for new retail space. As the market turns, now may be the time to “lock in” the current rental rates; before they increase, you should check your lease further.
This also means that if you have one, you should check your lease. Ask a few questions, such as:
- Do you currently have favorable rental rates?
- Will those rates remain favorable based on your lease’s automatic rate increase formula?
- When is your lease term up, and what are the renewal provisions?
- Is subleasing or an assignment of your lease an option under your lease and for your business operations?
- And more
Another pro tip is to consider, if warranted, contacting your landlord to renegotiate your NYC commercial lease. Maybe your long-term business prospects are poor, and you need less space or perhaps out of the lease entirely. Maybe your long-term business growth requires a new and different location; thus, you need to negotiate an end to your current lease. When a rental market and retail leasing turn positive, property owners and operators sometimes envision new tenants willing to pay higher rates. This can incentivize commercial landlords to renegotiate a lease.
The final pro tip is to seek guidance and legal advice from NYC commercial lease negotiators.
Contact the NYC Commercial Lease Negotiators
For more information, call the experienced New York commercial lease and real estate attorneys at Wright Law Firm NYC. We provide top-tier commercial real estate legal and legal services for the NYC business community. To schedule a consultation, contact our office by e-mail or call us at (212) 619-1500.