My shop, Random, was on State Street for 29 years. Visitors were half of my business. Now it’s deemed too funky to lease to. Some of those For Lease signs might as well read Faux Lease.
Signing a lease on State Street is a financially daring thing to do. It might as well read, “I owe the landlord a lot of money. I am responsible for almost everything. The landlord is responsible for as little as legally possible.”
The rents being asked reflect the value of the real estate, but not the actual state of brick-and-mortar commerce here. Here’s why:
1) The spending money of many locals has been greatly reduced by the rise in residential rents.
2) Most visitors like shops with local character. They have malls and chain stores at home.
3) The impact of the internet on retailers tends to be negative.
Our visitors are a significant source of business on downtown State Street. They come from almost everywhere. The majority, however, are from elsewhere in California, and most of those drove here. These people can take more home with them.
Sadly, the trend here is toward a long thin upscale mall. Unusual local shops are fewer and fewer. This is not the direction to go. If you think there are too many vacant stores now, wait until the next economic downturn.