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<\/p>\nNew York City’s small businesses\u00a0having trouble navigating the squeeze of rising rents, dwindling availability and soaring expenses are getting a boost from the city.<\/p>\n
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Mayor Zohran Mamdani<\/a>\u00a0doubled the funding for a city program designed to help commercial tenants in lease negotiations in his first municipal budget, up from $4M to $8M. Brokers and advocates say the program smooths out the leasing and opening processes for landlords and tenants alike \u2014 critical as\u00a0the market has gotten more competitive in recent years.<\/p>\n \u201cWe’ve heard great things about the program,\u201d said Jessica Walker<\/a>, president and CEO of the Manhattan Chamber of Commerce<\/a>. \u201cThe problems are that it’s a very small program and currently is only able to help hundreds of businesses instead of the thousands that we have.\u201d<\/p>\n The commercial lease assistance program was introduced in 2018 under then-Mayor Bill de Blasio, following the city council\u2019s passing of a law two years earlier that created new protections for commercial tenants.\u00a0<\/p>\n The program, run by the city\u2019s Department of Small Business Services, provides legal assistance to commercial tenants negotiating new leases, renewals, lease terminations and sublets, enforcing lease terms and oral agreements, and fighting breaches of contract by landlords.<\/p>\n Tenant advocacy nonprofit Association for Neighborhood & Housing Development helped push for both the 2016 law and the creation of the commercial lease assistance program because of how much confusion it saw largely minority-owned small businesses face when starting.<\/p>\n \u201cThere really isn’t a clear and good standardized commercial lease,\u201d ANHD Executive Director Barika Williams said. \u201cYou have a huge variety of what’s being offered in terms of timeline for leases, in terms of lease renewal, in terms of obligation and who pays what of the lease.\u201d<\/p>\n Christofer Akum, CEO and founder of Lifestyle 1104 Juice Bar, said he wishes he had known about SBS\u2019 offerings when he was opening his first location in the Bronx.<\/p>\n While the commercial leasing assistance program helped him open a second location in Hudson Yards, he could have avoided having to redo the plumbing for his Highbridge space three times over to achieve compliance if he had known about those services earlier, he said.\u00a0<\/p>\n \u201cThe city being able to help us be more compliant, help us understanding what we have to do and how to handle food, that’s very, very important,\u201d Akum said.<\/p>\n The program doesn’t just benefit tenants. It also makes it easier for landlords to lease spaces to small businesses, Cushman & Wakefield Executive Managing Director Steven Soutendijk said.<\/p>\n \u201cIt doesn’t benefit a landlord to have a tenant on the other end of one of these negotiations who’s not capable of negotiating to their benefit,\u201d he said. \u201cIt’s very helpful to have somebody who knows what they’re doing, and if they don’t know what they’re doing, they have somebody who can help them deal with some of the minutiae.\u201d<\/p>\n The program has been allocated $4M a year for the past three years running due to demand, although an SBS spokesperson didn\u2019t respond to Bisnow\u2019s questions about who received the funding in recent years and whether all of it had been deployed.<\/p>\n The additional funding to help tenants is being put forward by the city at a moment\u00a0when competition for retail real estate is white-hot.<\/p>\n Average availability in the nine prime corridors tracked by JLL<\/a> was 11.9% at the end of\u00a0the first quarter of this year, which is the lowest quarterly rate recorded by the brokerage since it started tracking the corridors in Q3 2017.\u00a0<\/p>\n The lack of available space is pushing tenants to take space\u00a0on side streets, according to the Real Estate Board of New York<\/a>\u2019s most recent report<\/a>, rather than to find a spot on another main drag.<\/p>\n Demand is pushing asking rents up, too. While\u00a0still below the post-Covid peak of $608 per SF achieved a year ago, average asking rents in JLL\u2019s prime submarkets increased from $585 per SF in Q1 to $592 per SF by the end of Q2. Some of the asking-rent dip is attributed to prime space being leased up.<\/p>\n \u201cIt’s now a landlords’ market, and landlords are getting multiple offers,\u201d Compass Vice Chair\u00a0Robin Abrams<\/a>\u00a0said. \u201cTenants are, I think, asking for less incentives and willing to be more aggressive in what they’re offering landlords.\u201d<\/p>\n The new funding aligns with the mayor\u2019s strategy of taking on \u201cbad\u00a0landlords,\u201d which to date has largely focused on owners of low-cost housing<\/a>.<\/p>\n It also includes litigation services for business owners who claim their landlords are harassing them,\u00a0according to Cassio Mendoza, deputy press secretary for economic justice\u00a0in the mayor’s office.<\/p>\n \u201cThe Mamdani administration is continuing to look at ways to further support business owners dealing with commercial rent abuse,\u201d Mendoza said in an email.<\/p>\n Mamdani\u00a0has also vowed to help small businesses by cutting red tape, last week\u00a0rolling out 50 measures<\/a>\u00a0to reduce bureaucracy,\u00a0like reducing<\/a>\u00a0the number of licenses that barbershops need or the requirement for restaurants to have multiple licenses just to serve ice cream.<\/p>\n The new funding for commercial lease assistance, in addition to removing hurdles for small businesses, shows New Yorkers that Mamdani intends to deliver on campaign promises, Walker said. But the pro-tenant maneuvers are not necessarily indicative that the administration is trying to tip the scales fully toward tenant power.<\/p>\n \u201cI think that the administration understands that, you know, a healthy ecosystem means that we all do well,\u201d she said. \u201cYou just can’t have thriving tenants without thriving landlords and thriving buildings.\u201d<\/p>\n Still, there are ways she would like to see the program modified to help more tenants, like creating a standardized lease template for would-be renters that would free up time for SBS staffers to help retail tenants address more complex problems, like eviction hearings.\u00a0<\/p>\n \u201cOne of the things that we would love to see is to expand the services to potentially help small businesses who lack the means to be able to represent themselves in court,\u201d she said.<\/p>\n Additionally, issues that tenants might struggle with \u2014\u00a0like a steep rent increase \u2014\u00a0may not fall within the program’s remit. For example, if a business is renewing a lease after being\u00a0in place for 20 years, its landlord is likely just calculating\u00a0new rents to match current market rates, brokers said.\u00a0<\/p>\n \u201cThere’s an economic decision,\u201d Soutendijk said. \u201cThis is lease and legal assistance. It’s not going to make a landlord make an irrational decision on taking a below-market rent.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"New York City’s small businesses\u00a0having trouble navigating the squeeze of rising rents, dwindling availability and soaring expenses are…\n","protected":false},"author":2,"featured_media":308732,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[116794,128,2383,3272,54098,1505,54599,9,24,63,15168,22437,116793,10371,2182,129,131,130,82],"class_list":["post-308731","post","type-post","status-publish","format-standard","has-post-thumbnail","category-the-bronx","tag-barika-williams","tag-bronx","tag-compass","tag-cushman-wakefield","tag-jessica-walker","tag-jll","tag-manhattan-chamber-of-commerce","tag-new-york","tag-new-york-city","tag-nyc","tag-nyc-retail","tag-real-estate-board-of-new-york","tag-retail-rents","tag-robin-abrams","tag-steven-soutendijk","tag-the-bronx","tag-the-bronx-headlines","tag-the-bronx-news","tag-zohran-mamdani"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/308731","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/comments?post=308731"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/posts\/308731\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media\/308732"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/media?parent=308731"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/categories?post=308731"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ny\/wp-json\/wp\/v2\/tags?post=308731"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/p>\n