Manhattan Real Estate Woes Provide an Opportunity for SMBs

Julija A. Image
ByJulija A.
January 12,2021

You can finally afford shop space in Manhattan.

That's the good news from the Real Estate Board of New York's Fall 2020 Manhattan Retail Report, a summary of vacancies and rental prices throughout Manhattan.

The bad news is that the COVID-19 pandemic and associated restrictions on retailers and consumers have made it hard for even well-established retail giants to turn a profit in New York.

According to REBNY, retailers are demanding discounts on rent for retail space following the departure of Papyrus, GNC, Modell’s Sporting Goods, Metro PCS, Mattress Firm, Duane Reade, and other major retailers across the island. Discounts of up to 25% are available, with prime retail space going for rates that haven’t been seen for decades.

And that's just the asking price. REBNY says landlords are currently accepting an average of 20% less than their preferred price. This is a great opportunity for low-overhead businesses that can prosper in spite of the reduced rate of retail traffic caused by the pandemic lockdown. And when the economy recovers, retailers who take the leap of faith now will have more business than they’d ever dreamed of.

Let’s not forget about the workers in this industry. New York City’s retail employment rate fell about 27% in April due to the effects of the COVID-19 pandemic, which at the time was spreading through the Big Apple like wildfire. According to the Center for New York City Affairs, 29,000 jobs in the city’s retail industry were lost in 2020. On top of all that, the insecurities, political turmoils, and other emotional or financial stresses of 2020 had a strong impact on many workers’ professional and private lives.

So, what are the prospects for those affected by the crisis? Well, if you take a brief stroll down Fifth Avenue, you might be in for a shock. Due to the unprecedented impacts of the COVID-19 crisis, many businesses have had to abandon ship, which means more and more vacancies are showing up. Retail rental prices have fallen to historic lows, leaving nothing but empty stores and more-than-desperate retailers. The market might take years to recover.

But let’s look at the situation from a different perspective. If you have a great idea and want to turn it into a startup, or if you already own a small business and are looking to expand, this might be just the right time. Why not open a store and tuck it among the gleaming windows of Fifth Avenue? If you can hang on until the end of the pandemic, you'll be sitting pretty, and you might find yourself helping the world’s biggest economy recover from the crisis.

About the author

Julia A. is a writer at With experience in both finance and marketing industries, she enjoys staying up to date with the current economic affairs and writing opinion pieces on the state of small businesses in America. As an avid reader, she spends most of her time poring over history books, fantasy novels, and old classics. Tech, finance, and marketing are her passions, and she’s a frequent contributor at various small business blogs.

More News

Details of a long-awaited COVID economic stimulus package were revealed by congressional leaders on December 20. Congressional leaders say it is intended to deliver much-needed assistance to both households and small businesses.The bipartisan deal came after months of stalled negotiations. The new package is substantially smaller than March’s $3 trillion CARES Act. Its benefits are focused on the unemployed and small companies, with cash grants to taxpayers reduced to $600 compared to March’s $1,200. Congressional leaders characterize it as a financial bridge that will help the economy stay afloat until coronavirus vaccinations make it possible to restore normal life throughout the United States. Small businesses have been hit especially hard by the pandemic and associated lockdown measures. Researchers say that the number of small business owners fell by 3.3 million (22%) from February to April 2020, while May and June saw further drops of 15% and 8%. A LendingTree survey reveals that 74% of small business owners took on debt to stay afloat during the pandemic. Out of the proposed $900 billion in economic aid, $325 billion will be dedicated to helping small businesses stay afloat. This includes $284 billion in loans via the Paycheck Protection program, $20 billion for businesses in low-income communities, and $15 billion for live venues - probably the hardest-hit sector of the economy. The stimulus package also includes direct payments to taxpayers, boosted unemployment benefits, vaccine funding, transportation aid, and assistance to farmers.If everything goes according to plan, the bill will be introduced in the House and Senate on Monday, December 21, and passed the same day. The package comes after what appeared to be a permanent stalemate between Democrats, who pushed for more aid, and Republicans, who favored a smaller, more focused assistance package. This political impasse, coupled with the turmoil left in the wake of the presidential election, threatened to leave Americans and the COVID-stricken economy without any economic assistance from the federal government. The delay has had unrecoverable repercussions for many small businesses. Still, even before the stimulus package accord was announced, many small business owners remained optimistic. According to a survey conducted by Capital One in November and December 2020, 53% of small business owners report that their financial position is the same or better than in the pre-COVID period. Additionally, 67% believe their operations will return to normal during 2021. About 85% of business owners are confident that they will still be operating six months from now, and 60% think the US economy will be favorable for businesses in 20201.
By Damjan Jugovic Spajic · December 22,2020
Amazon is starting the Amazon Small Business Academy to help small businesses, startups, and small company owners to enhance their online presence and increase sales through a series of webinars and classes.That's the bottom line of the announcement released by Amazon yesterday. According to the Small Business Administration, small businesses and startups make 99.9% of U.S. businesses. Almost 60 million people work for small companies, which makes this type of business vital for the U.S economy. Amazon's initiative includes a number of online seminars, meetings, and presentations created in order to educate entrepreneurs and help them empower their brands."Amazon Small Business Academy is focused on accelerating small business’ digital capabilities, whether they are a brand new company or one that has been in business for generations,” said Nicholas Denissen, Amazon Vice President of Small Business.The first seminar, held today in Mississippi, presented a special guest, U.S. Senator Roger F. Wicker. Amazon hosted around 100 attendees introducing them to the newest business strategies and methods for growing sales.The next event is planned for December, but the location has not been announced. This will be followed by a series of in 2020 held across the United States.Additionally, Amazon Small Business Academy provides grants for supporting digital business courses that will start in February. The courses will be held by the following colleges: Ohio and North Idaho College in Coeur d’Alene in Idaho; Bunker Hill Community College in Boston; State Center Community College in Fresno; Houston Community College in Houston; and Red Rocks Community College in Lakewood.The Amazon Small Business Academy also provides webinars aimed at helping small business owners develop digital competences and improve marketing skills. These webinars include information on how to increase sales in an Amazon store, and allow users to ask questions live and communicate with experts.Small businesses and startups sell 4,000 items every minute through Amazon stores. According to the latest statistics, 58% of Amazon's online sales are made by third-party sellers — small- and medium-sized companies. In order to help small businesses increase their sales online, Amazon released 150 tools and features in 2019 as part of their $15 billion investment in the success of their selling partners.
By Milja · December 14,2020
Small businesses in industries sensitive to changes in the housing market are experiencing sales drops as fewer homes are sold — a result of higher home prices and a shortage of listings. Home prices have risen in 95% of cities, with the highest increase noted in the Mountain States, an area which includes Colorado, Arizona, and Idaho, among others. The city of Lansing, MI, experienced the most dramatic increase: 25.1% in year-to-year gains. Despite a promising rise in July and August, the number of existing-home sales fell in September by %2.2. With the median home price at $272,100, lower mortgage rates aren’t enough to entice buyers. Additionally, fewer people are putting their homes on the market. Many current homeowners purchased or refinanced their homes at a time when mortgage rates were lower than the present ones. Moving today would mean paying higher rates, which is disincentivizing.The drop in home purchases is creating a domino effect and impacting a wide array of small businesses. Most people renovate their homes before putting them on the market, so fewer sales mean less business for contractors, many of whom are small businesses. The decline is expected to continue into the third quarter of 2020. Chris Herbert, the managing director of Harvard University’s Joint Center for Housing Studies, predicts: “Continued weakness in existing home sales and new construction will lead to sluggish remodeling activity next year.”Besides contractors, furniture sales outlets are also feeling the blow, as people are much more likely to purchase furniture when moving into a new home. The Commerce Department reports that sales are down 0.2% in the first nine months of the year, compared to the same period last year. Appliance and electronics retailers aren’t faring any better, with sales down 3.9% for similar reasons. While these figures include retailers of all sizes, small businesses tend to mirror changes observed in their larger counterparts.
By Milja · December 14,2020

Leave your comment

Your email address will not be published.

There are no comments yet