uptowngirl

Another one bites the dust

New York City's own airline Jet Blue which has its own terminal at NYC's JFK airport( with free WiFi and great food outlets) maybe moving away from the city when the lease on its headquarters in the Queen's section of Forest Hill expires in 2012. News reports however say the airline may actually leave within the next 6 months unless the city gives it an incentive to stay -http://www.fox11az.com/news/business/82181827.html. I think it may have to do with revised rents.

So many stores and businesses have had to move away from NYC recently but in spite of this rents on commercial property continue to rise-http://www.crainsnewyork.com/article/20100117/FREE/301179964. Are landlords in this city crazy? would they have empty properties rather than lower rents? a walk around the 80's on the Upper East Side yesterday revealed a startling amount of shuttered stores some of which have been empty for months. Does this make any economic sense?

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8 Comments

ajadedidealist 2yrs+

It's unfortunate, but true! Even in my neighborhood some of my favorite institutions are shutting down - only to be replaced by eyesores like Dunkin Donuts franchises that have the neighbors up in arms! I suppose you can't fault landlords for trying to make a living, but at the same time, it really does erode at the sense of community to replace mom-and-pop shops with garish franchises.

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hhusted 2yrs+

Honestly, uptowngirl, because of the tight economy in the city, many stores are closing their doors. They just can't pay the higher rents, nor can they pay the higher taxes. I remember reading an article a few months ago that some economist predicted that by the year 2012, NYC was going to be a wasteland, if the trend continues with store closings. I hope not. I would hate to see NYC go down.

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Uraniumfish 2yrs+

Yeah, I think it'll be a couple years more till landlords catch on to the fact that the recession will last a while and property values aren't coming back. Until then, they'll hold on to those prices hoping things will bounce back. What they all want to avoid is entering into a lease agreement at a low price, only to see the economy recoup in a year.

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uptowngirl 2yrs+

@hhusted I agree with you who wants to see NYC become an economic wasteland. If I was a landlord in this city I would definitely lower my rent and at least get something from my property rather than allow it to remain unused and empty surely that 'something' would help cover some of my maintenance costs. At least that's what layman's logic tells me.

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BroadwayBK 2yrs+

Real estate isn't exactly a nice guy business, but they can't keep it up forever because eventually everyone will be living on the Jersey Shore with Snooki. Or in Hoboken.

I personally find it amusing that all these condos keep going up in Brooklyn - only to be left mostly empty. Maybe landlords would rather bide their time until a miracle economic boom happens and they can charge whatever they want for all the apartments they've kept empty? Maybe they are that optimistic.

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BroadwayBK 2yrs+

Also, if Jet Blue leaves JFK I will be really sad. Some of my first trips to the city were via Jet Blue and JFK.....

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uptowngirl 2yrs+

maybe the developers/landlords are subscribing to the view that if their lower their 'prices' they will dilute their brand. Its a school of thought many NYC luxury hotel chains subscribed to during the height of the recession rather than lower their prices they threw in freebies in order to try and maintain occupancy rates -http://therealdeal.com/newyork/articles/recession-strains-hoteliers-strategy.

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hhusted 2yrs+

It may be a brand thing, or it may not be. It is hard to say. If I was an investor, and had property, I would rather rent it out at lower cost and at least recoop my expenses for the mortgage than to not get any money at all. After all, don't those developers or owners have to pay a mortgage on each property? I wonder.