In order for the market for retail rentals on Charles Street to recover, landlords need to adjust their expectations and be more willing to strike a compromise with prospective tenants, according to one real estate broker in the know.
“On Charles Street, landlords aren’t used to this kind of environment, which is unique, granted,” said Joe Govern, a broker with Street & Company’s 78 Charles St. office. “I think they need to be more willing to consider the risks retailers are taking in this market and meet them halfway and give them some concessions, rather than have the burden be one-sided.”
But Govern also acknowledges that landlords can’t afford to take a gamble on a risky proposition, especially in the current economic climate, adding, “On the other hand, the landlord wants tenants they think are going to succeed so it’s not totally callous but rather the normal way commercial leases are handled.”
As of Friday, 19 businesses had closed on Charles Street since the pandemic struck, Govern said, leaving about 40 remaining (albeit many now have reduced hours and staff).
And as for new retail leases executed on Charles Street amid the pandemic, one retail business downsized to a smaller location on Charles Street through a deal that Govern credits to an understanding landlord, while the Blessing Barn – a nonprofit thrift/antique shop whose proceeds benefit the programs of Mendon-based Compassion New England – has a grand opening for its new 122 Charles St. location planned for Saturday, Sept. 5, from 11 a.m. to 6 p.m.
Unlike the three- to five-year leases that are commonplace for retail rentals on the street, Govern said these are instead both six-month leases “with the option to renew, depending on how the market pans out.”
Govern likens these short-term leasing arrangements to pop-up stores, which he encourages landlords to explore as another option for filling vacant retail spaces.
“If a landlord is sitting with a vacant property, it makes sense to do something [like a pop-up store] to tide them over,” he said.
Other prospective tenants have also recently looked at retail spaces on Charles Street, but they still have yet to strike a deal with their respective landlords.
“While they haven’t bitten the bullet and signed a lease yet, at least they’re thinking about it,” Govern said. “There’s a learning curve that’s hopefully going to be accomplished or achieved and more deals will be struck.”
As for state of retail on the street, Govern believes the downturn really started before the pandemic struck as consumers increasingly began buying more goods online.
“Even bigger brick-and-mortar stores [are vying] with the internet as more people are shopping online,” he said, “and with the creation of Amazon, people are used to getting [their orders] in a day or two, so it’s a challenge.”
Still, Charles Street continues to consistently draw steady foot-traffic and remains what Govern calls a “mecca for boutique stores.”
Said Govern: “The spaces are too small for big-box establishments…and what makes it unique is the street caters to these one-of-a-kind stores that serve the neighborhood.”
Meanwhile, Govern remains optimistic that the retail rental market on Charles Street will eventually rebound, although when and how that will happen is anyone’s guess.
“It’ll come back eventually,” he said, “but who knows what it will look like.”