A second location? During a pandemic? It’s within reach for some businesses
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This time last year, Pooja Bavishi had no idea what was going to happen to her business.
She had just opened an ice cream shop, Malai, in Brooklyn a year before, but with New York going into lockdown, it felt like it could be the end.
“I will never forget the Thursday before we were forced to shut down,” Bavishi said. “It just felt like the longest day of my life.”
Now, almost exactly a year later, she is in a very different place, one she never expected: She is looking for a second commercial space to rent to expand Malai. In a twist Bavishi did not see coming, the pandemic ended up driving more customers to buy ice cream online.
“Our shipments went up 1,200%,” she said. “We got to a point where we realized that we were not able to grow any more out of this current space if we don’t get another space.”
This time, instead of a shop where customers can walk in off the street and order a cup or a cone of one of her Indian-inspired flavors, Bavishi is looking for more of a fulfillment center, with plenty of room to store, pack and ship pints and pints of ice cream.
There are a lot of potential options for her to choose from.
Bavishi’s broker Peter Schubert, the managing director for commercial leasing at TerraCRG, estimates that between 10% and 20% of commercial real estate in Brooklyn is vacant right now — officially.
“On top of that 10 or 20%, we know that there’s kind of this shadow inventory of these other spaces, which haven’t quite hit the market yet,” Schubert said. “I think we’re at some kind of a record number, probably historic number that in some cases are in the 20 to 30% range.”
For months, TerraCRG was getting almost no calls from prospective tenants interested in renting retail or other commercial space, according to Schubert. But with COVID vaccines rolling out and warmer weather on the way, that’s changing.
“I feel we hit some inflection point sometime in the last six or eight weeks,” Schubert said. “We’re really very busy. A lot more tenant activity and a lot more enthusiasm and optimism around the future.”
Other Brooklyn-based brokers and landlords are experiencing that, too.
“Through December, we were basically getting nary an inquiry, there was no activity. Since the beginning of the year, things have become much more active,” said Michael Pintchik, who owns dozens of buildings with retail space in Brooklyn. “A lot of new entrepreneurs are going to have an opportunity to open shop when that wouldn’t have been possible, because the rents have been affected and they are down somewhat.”
They’re not down nearly as much as some tenants expect them to fall, though — maybe between 5% and 15%, Pintchik estimates, depending on location.
Still, it is a tenant’s market, and Bavishi is looking to take advantage.
“To think that just a year ago, I was looking up bankruptcy laws, and a year later, I’m looking for a second space,” Bavishi said. “It’s exciting, and I’m really proud. I’m really proud of the company. I’m really proud of my team.”
And she’s ready to sign another lease and see how much more her business can grow.
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