Some NYC businesses are trying to negotiate for lower rent
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During the pandemic, many of New York City’s small businesses have struggled to keep up with the city’s expensive commercial rents.
Joanne Kwong, the president of Manhattan retailer Pearl River Mart, said she was paying around $1 million a year in rent for two locations and a warehouse before the pandemic. She said negotiating to try and get a break on her rent is like rolling the dice.
“Our situation is kind of dependent on the whims or the situation of the landlord,” she said.
She said one of Pearl River Mart’s landlords has agreed to reduced rent. Another is demanding 100% of it. Kwong said Pearl River Mart might have to leave that location.
Jawed Farooqi said his revenues have been down almost 60% during the pandemic. He owns a framing store, called Rooq, with three locations in Manhattan. Farooqi said one of his landlords has reduced the rent, another argues about it every month and a third won’t negotiate.
“I was explaining to him that every day I see a new store closing, and he’s like, yeah, you’re right. And I’m like ‘So you know that this is how it is, why do we have to fight?'” he said.
Commercial leases in New York tend to be long and they are not very flexible, said Rachel Meltzer, who teaches urban policy at the New School. And, the city doesn’t have a consistent way of regulating commercial rents, even in normal times, she said. “It’s hard to come up with something systematic in the middle of a crisis,” she said.
Meltzer said right now money would be the best equalizer. “Some kind of bailout, just to support these businesses and help them pay whatever rent they have to pay,” she said.
But small businesses do have some leverage. Nicole LaRusso, director of research and analysis for CBRE Tri-State, a real estate services firm, said in New York City, rents are down and vacancies are up.
“There’s not a lot of tenants lined up, waiting for tenant X to move out so tenant Y can move in,” she said.
So if landlords don’t negotiate, they may be rolling the dice too.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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