Provincetown Business News and Information
Cape Cod Voice | By Seth Rolbein
Provincetown’s Commercial Street enters the 2006 season with more uncertainty than usual. For those who see the street not so much as an outrageous outpost but more as an economic vanguard, a harbinger of where the broader Cape economy is headed, that’s cause for general concern.
Long-time observers of Commercial Street in Provincetown are nearly unanimous:
There are more For Rent signs on retail storefronts, closer to the start of the season, than anyone has seen in decades.
“No question,” says Candace Collins Boden, executive director of the Provincetown Chamber of Commerce, who has been watching the street for more than 30 years and also happens to be one of its landlords - the Chamber rents out five shops, all in the downtown bull’s eye between town hall and MacMillan Wharf.
“I’ve seen it go up and down, up and down, but about a month and a half ago, I counted 18 empties,” she recalls. “That’s a lot. I’m guessing we may be down to about 13 or so, and a few more will fill in during May. But even so, that just doesn’t look good, or healthy.”
There’s no widespread panic, but according to a handful of reports, landlords have started dropping their asking prices. Others are musing about Commercial Street’s symbolism and fate, weighing just how much overhead the traffic can bear, wondering if the evolving nature of the town and its housing market are redefining what for generations has been one of the Cape’s busiest, healthiest (and funkiest, and most seasonal) downtowns.
If anyone doubts that, consider this:
Commercial Street rents in the downtown, meaning six to eight blocks on both sides of town hall, can run as high as $120,000 to $140,000—for a season that is the shortest of the Cape’s short summer, as few as eight weeks of truly high action.
Even very small retail spaces, only a few hundred feet square, can command as much as $40,000 a season downtown. Heading east and west, prices drop, but not off the table; in the West End, for example, which has become more fashionable in recent years, side-by-side storefronts rented for $50,000 and $75,000 last year (the larger one measuring about 1000 square feet). Both tenants threw in the towel and vacated; a new owner of the building is charging this year’s occupants significantly less.
Longtime tenants, working with what some might argue are smarter, less greedy landlords, aren’t being charged top end, often offering back stability and good relationships in return. Collins Boden reports, for example, that one Chamber tenant downtown is still being charged $26,000 for prime space that has been occupied for years. The Chamber is charging only $18,000 to $20,000 for each of its four shops around the corner on Lopes Square, still in the very center of town; that’s certainly below typical market, but then again, the storefronts are only 150 to 200 square feet, and not right on Commercial Street.
Gregg Russo at Atlantic Bay/Sotheby’s International Realty, another longtime and astute observer of the town, says that he has prominent retail properties available in the West End that are 500 to 600 feet, renting for $35,000 to $40,000.
“I think there’s going to be a last-minute push,” he says. “You know, it’s easy to forget from year to year what’s empty, and then people make unrealistic comparisons. Or they see a landmark store, an obvious store that’s empty, and then it seems like there are a lot of them, but in reality it’s only a handful.”
One interesting anomaly about the Provincetown market is that unlike most places, landlords don’t charge a strict per-square-foot price. “It’s location, and only location,” says Collins Boden. “I was shocked when I first realized that, and outsiders will always ask about the square-foot cost, but it doesn’t apply.” And the only retail space that will rent, she adds, is street level. “Upstairs? Forget it. In Provincetown, you won’t get anyone in there.”
Others who have studied the market say that a rough average of per-square-foot rents across town would be about $65, but the variation is so great that the figure seems contrived.
Russo calls the overall market “a bit slow,” acknowledging that even some smart, realistic landlords are having trouble filling their shops. Then there are the landlords who want rents “like telephone numbers,” he smiles. “There’s no basis to them.”
If there ever was, it lay in Commercial Street’s years of outrageous foot traffic. Day trippers by car and boat, weekly renters, seasonal renters, chic second homeowners, all joined in the melting pot, creating a retail dynamic that allowed T-shirt shops and high fashion boutiques to coexist. East End art galleries could move five-figure paintings while knick-knack shops sold cheap sunglasses nearby. A restaurant sporting $20 entr�es could prosper within hailing distance of a successful $2 hotdog stand.
Those days are not over, but new economics have made the street less elastic. At issue is not just retail rents, but the 800-pound gorilla in every Provincetown discussion; the housing market.
“Real estate is the engine that runs this world, we all know that,” says Collins Boden. “Prospective retailers are looking at the cost of rents, but then they’re also looking at the cost of living here, and find it very daunting. It’s that combination that certainly has created this situation.” Without a place to live � let alone any confidence that summer employees could find a place to live � newcomers are not inclined to sign expensive shop leases.
So Provincetown’s Commercial Street enters the 2006 season with more uncertainty than usual. For those who see the street not so much as an outrageous outpost but more as an economic vanguard, a harbinger of where the broader Cape economy is headed, that’s cause for general concern. And without doubt, the factors reshaping the street are present across the Cape.
But also without doubt, Gregg Russo’s scaled-back, more optimistic perspective has merit too:
“They’ve been predicting the demise of Provincetown since I first came here,” he says (and he’s been in real estate since 1982). “This is a very fluid place, and that’s what it will continue to be.”
All materials on this site copyright 2001-2006 by The Cape Cod Voice, all rights reserved. Reproduction by permission only.
Copyright 2006 by The Cape Cod Voice, all rights reserved. Reproduced by permission.
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