Should residential developers stop including "retail" space in their new Midtown towers & complexes? (Atlanta: salons, apartments)

[atler8]

It seems obvious to the eye when one is either walking or driving through Midtown that there is a large & troubling surplus of vacant retail space, much of it in newer residential high rise & mid rise structures. Combined with the glaring number of vacant store fronts along Peachtree Street in the buildings that were intended to comprise the "Midtown Mile" retail district that failed to take hold as envisioned, there is a vacancy problem that only seems destined to grow worse as more retail space comes online with the opening of additional residential structures.
With Colony Square reworking itself in a major effort & set to offer a new brand that will emphasize a much larger variety of retail offerings, are we about to see a crash in the market due to an over-saturation of such space?
Atlanta would seem to not be alone in having a retail street scene vacancy problem though as I recently read a startling piece in the New York Times that included a large photo essay which visually showed the extent of the exploding problem of store front vacancies there in Manhattan & in other boroughs.
In the text of the article it was revealed that the vacancy rate in Manhattan has shot up from 7% to 20% since 2016.
And a friend of mine from Seattle has told me that the vacancy problem is similarly growing worse there as new residential buildings sprout & offer retail space that is oversaturating the intown market while the adjacent C.B.D. retail area struggles with it's own set of problems.
All cities have characteristics of economic trends & performance that are peculiar only to them but, if those much more densely populated cities are having a retail vacancy meltdown of sorts, what does it portend for Midtown Atlanta? Should developers & lenders quickly apply the brakes now before an economic downturn (& we all know that one is soon due given the nature of the business cycle) brings the problem to the point of a major crisis?
See the NYTimes article below.


https://www.nytimes.com/interactive/...gtype=Homepage

[bryantm3]

no, they need to drop the rents. there are thousands of businesses that would love to locate there but can't afford to because the developer is holding out for "luxury" and can afford to offset the loss because apartment rents are so high.

[atler8]

Yes, rents are high but will the vacancy problem go away merely with a rent price drop?
I don't at all see anything like "thousands" of businesses wanting to locate there. Let's be real. How many dozen dry cleaners, or gift shops or nail salons or cafes or coffee shops or bars can the Midtown population day time or night time truly support even if retail rents are lower?

Let's face it. Midtown's retail scene is severely hampered by the lack of parking space that keeps people from other areas of Atlanta from coming there to spend money on retail. And the growing problem of day time traffic woes is not a help either.

As cited in the NYTimes piece I linked, the spiraling vacancy rate there is occurring in a city that has some of the highest population densities & a longstanding tradition of a thriving street retail scene, and one in which people have a tradition of walking to shop (which Atlanta almost completely lacks). If the problem is growing huge there, how can a much less dense & a much smaller population base area like Midtown hope to avoid an oversupply of retail space? Lower rents are not going to be the magic bullet to solve the vacancy woes.

[Iconographer]

It doesn't seem healthy or productive to the community to do so. Isn't one of the common complaints about Downtown and Midtown a dearth of accessible retail?

[aries4118]

I haven’t researched it in a while, but we could use some pointers from another place.

How does Vancouver handle this?

-a commission to recruit retail?
-more ground floor/from the street apartments and townhomes—even on major corridors (meaning less over-abundance of retail)?
-other uses? (municipal, community-centers, non-retail businesses and organizations)

[aries4118]

Also, in terms of Atlanta, the city works on channeling new retail and new retail applications to these corridors. With less new retail in nearby adjacent areas.

[chiatldal]

Originally Posted by atler8

Yes, rents are high but will the vacancy problem go away merely with a rent price drop?
I don't at all see anything like "thousands" of businesses wanting to locate there. Let's be real. How many dozen dry cleaners, or gift shops or nail salons or cafes or coffee shops or bars can the Midtown population day time or night time truly support even if retail rents are lower?

Let's face it. Midtown's retail scene is severely hampered by the lack of parking space that keeps people from other areas of Atlanta from coming there to spend money on retail. And the growing problem of day time traffic woes is not a help either.

As cited in the NYTimes piece I linked, the spiraling vacancy rate there is occurring in a city that has some of the highest population densities & a longstanding tradition of a thriving street retail scene, and one in which people have a tradition of walking to shop (which Atlanta almost completely lacks). If the problem is growing huge there, how can a much less dense & a much smaller population base area like Midtown hope to avoid an oversupply of retail space? Lower rents are not going to be the magic bullet to solve the vacancy woes.

From the same NYTimes piece you link, so you sort of nick pick your argument because bryantm3 point is also in the link referring to New York

"Some tenants blame the warehousing of storefronts by landlords waiting for development deals or zoning changes, or simply holding out for top rental dollars from large corporate retailers like drugstores, banks and restaurant chains. But even many national chains have shrunk their roster of stores.

Some landlords say they simply cannot find retail tenants willing to lock in long-term leases at rents that enable them to meet building payments. Others say that retailers are not biting, even at bargain rents. Whatever the factors, the vacancies are changing the look of the city’s streetscape."


The issue maybe more complex then one simple soulation. Retail can't just be anywhere it has to be some where it meet it's demographic. It's possible the desirable areas are too expensive at the same time the non desirable areas maybe affordable but they bad locations for the business. So treating all vacancies the same though out a city is already erroneous

Also point is bit of hysteria of NY part, 20% vacancies is not bad, it maybe higher than what NY was. but hysteria your making it seem like NY is at half or more vacant. Also the actcle use all of New York, So again vacancies on Madison avenue would be a different situations for vacancies that would be in a blighted area in Brooklyn. The comparison to Atlanta to New York is also off, New York isn't just denser and populated it has significant more retail in the first place. So saying if density NY is having a issue so Atlanta being less Atlanta is overbuilding retail is flawed. Because Atlanta doesn't have retail at density of NY in first place. As long as Atlanta build in a rate comparable to the area it's fine.

[AnsleyPark]

Blame it on online shopping.

[arjay57]

I am okay with it either way. People will walk to restaurants and bars but they are probably less likely to do so for shopping. Who wants to haul their bags around in the boiling sun?

[North Beach Person]

Bottom floor retail is likely a requirement for approval. Mixed use development is the new (last 15 or 20 years) in urban development.