May 11, 2020 By Christian Murray
The biggest issue for bars and restaurants right now is paying rent.
We talk to Luca DiCiero, founder and CEO of the real estate firm NYSpace Finders in Astoria, about the challenges these businesses face and the willingness of landlords to negotiate with them.
DiCiero has brought many business operators to western Queens, coordinating relationships between landlords and commercial tenants, since he founded his firm 10 years ago.
He says that many landlords and business operators are working together—although “there is some tension” as both parties try to weather the economic crisis.
Many landlords are prepared to negotiate with tenants, he says, although it is very “case by case,”
DiCiero said that he has found that the mom and pop landlords—and there are many throughout Queens– are being more flexible.
“The smaller landlords are a little more attentive, a little more understanding and they try to assist them,” he said. “That building is their baby; their retirement; and they want to get some income from it and don’t want it vacant for six months.”
Bigger landlords, he said, can absorb a vacancy and they know that they will be able to rent it in six months to someone else with a different concept.
“The rent might drop 25 percent but someone will take it,” DiCiero said, who sees a big softening in the market.
However, he said, the big property owners are wary of getting a bad reputation by playing hardball. “The word gets out,” so many are prepared to talk and negotiate.
DiCiero said that many of the small business he has been dealing with have just received federal help through the Paycheck Protection Program, which provides 2.5 months of payroll, that will sustain many for 30 to 60 days.
DiCiero recommends that all business owners reach out to their landlords.
“We strongly advise everyone to communicate– both landlord and tenant,” DiCiero said. “It is in everyone’s best interest.”
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One Comment
Seems like this is completely opposite of how it ought to be. Larger landlords who are fine with an impending 6 month vacancy can clearly offer the 2 months of free rent needed for small businesses with forced closures. This is the only way small business can continue in this city. Rent is often 3x the amount of monthly payroll so while payroll may be covered by PPP loans or unemployment benefits, there has been a complete refusal to address that rent is simply too high to be sustainable. This has been the problem in this city for the past 15 years and will not change until reasonably addressed. Retail occupancy was already at 50% at the end of February across the city because landlords are able to wait it out. This is so wrong and bad for city life yet no one wants to do anything about it. It is the same fir residential buildings -the landlords who have been overcharging tenants for years b/c it is allowed, cannot let go of a bit of money for 2 months? Are you kidding me? Unbelievable that no one in government is addressing this problem.