A week ago I was back in my favourite city – New York. It’s probably appropriate to forget how many visits – possibly 27?
One of the things I love about the City is its ability to re-shape itself. It changes each time you go. And this is especially so in how the retail offer changes (with the possible exception of 5th Avenue). Its seems that in a very short space of time a whole street can change.
In the UK our average lease lengths have increased in the last couple of years (as the market has improved) to around 7 years. In the USA it is more likely to be a three year lease – possibly 5. We have an archaic system of ‘rights’ (which are best described as a dark art!) – in the USA this much less an issue. If you lease a premises for 3 years that is it – it ends at the fixed date in the future. Both parties walk away from the agreement, That is not the case in the UK unless you have excluded certain rights.
In my industry here in the UK you have to have some faith in the market – albeit it is slightly skewed by these ‘rights’. In the USA if the parties don’t agree a new rent then the parties walk away!
This true market in the USA has some interesting consequences. In one particular street this has become very visible. Bleeker Street came to prominence as a result of Sex In The City – especially The Magnolia Bakery. But around it there were some very cool and quirky shops. John’s Pizza remains a staple part of any trip. But this time I noted that there are a lot of vacant shops – and a bit of research suggests that many of the smaller traders have moved out because of the hike in rents.
What seems to be happening is that the smaller traders are moving outwards (Bleeker Street records is no longer on Bleeker Street!) and some of the big boys are moving in – Starbucks have a new store. This is all good – but it has already lost some of its attraction (to me).
But I have no doubt that it will change again – or, more likely, a new neighbourhood will emerge as the cool place. The challenge is where next?