The ABJ poses the question. The real question is: why is retail turnover so high on Second Street?. The answer is quite simple and academic.
Income < Expenses
There you go. The worst economy in a century does not generate enough income for a boutique clothing or furniture store to thrive. Combine that with already expensive leases (in the ballpark of $32/ft NNN) and Second Street finds itself in a perfect storm for tenant default. Eventually, empty store fronts will have a snow ball effect on adjacent retailers. Landlords are loathe to lower their lease rates, but perception is often reality, and the perception of Second Street is “luxury” goods. Many marketers will tell you that “luxury” is no longer a good adjective to promote your wares.
Now, as I’ve written before, the tenant mix on Second Street, and in downtown Austin in general, is out of balance. The next wave of successful retail in Downtown Austin will be for stores offering goods and services that people can afford and need to purchase on a regular basis.
Address the tenant mix problem and Second Street will be an unquestionable success.
