Retail rents are back above pre-pandemic levels, though business hasn’t come back for everyone.
Walk down Boylston Street, and you may think the shuttered storefronts stretching from the Pour House Bar & Grill to the former Lord & Taylor portend a thoroughfare in trouble. Gone, too, are Crate & Barrel, The Tannery, Max Brenner’s. “For lease” signs abound, block after block.
And yes, it’s a neighborhood on the precipice of change as office workers adopt new hybrid schedules and the state aims to sell the Hynes Convention Center.
But looks, I found out, can be deceiving.
Behind the vacant storefronts, the Back Bay is getting ready to bloom again. Those empty spaces belie a robust retail market, with confident landlords holding out for the right tenant and good terms, according to Whitney Gallivan, managing director at Boston Realty Advisors. Indeed, she said, retail rents have bounced back to pre-pandemic levels, with coveted spots going for 10 percent more than in the old days.
“Space is filling up on Newbury and Boylston streets rather quickly,” said Gallivan. “I would say it feels stronger than pre-pandemic. There is a hungry appetite for deals and being in Boston.”
It’s a stark contrast from the depths of COVID-19. I remember walking down Newbury Street on a glorious spring day in May 2020, just after the state began to lift lockdown restrictions, to find the sidewalks empty, street parking plentiful, and many shops yet to reopen. The busiest spot was the UPS store with a line out the door, people using their lunchtime to send packages.
Today, sidewalks are bustling, and you again have to circle for street parking. The office workers in the Prudential Center and Copley Place may not be fully back in-person, but the area’s restaurants are busy and hotels are doing a brisk business between weddings, galas, and the return of some conferences and corporate travel. A full-on Boston Marathon on Monday that brought runners and spectators from the around the world felt like icing on the cake.
“April traditionally is our Black Friday,” said Dan Donahue, president of the Saunders Hotel Group, which owns the Lenox Hotel on Boylston Street. “You stop the red on your profits/loss statement and start seeing black.”
Donahue said occupancy at the 214-room Lenox is on pace to return this year to 2019 levels, though rates haven’t fully recovered. Still, given how much business was off during COVID, he is not complaining.
“In my wildest dreams, I didn’t think it would come back as fast as it has,” he said.
Still for Back Bay hoteliers like him, the future of the Hynes weighs heavily. They have built their business models around the state-owned convention hall hosting more than 100 conferences a year and drawing over 200,000attendees or more, all told. Residents and business leaders want a guarantee from the state that any redevelopment of the Hynes maintains a significant amount of meeting space.
“That’s the elephant in the room,” acknowledged Donahue.
Another elephant: all those empty storefronts.
There will always be turnover on a street like Boylston, and the pandemic accelerated that process. But a key sign of strength is how quickly new shops and restaurants move in to the old space. And this spring Gallivan said she has seen an uptick in interest, with her team giving prospective tenants tours on a daily basis. It may take months, even years, for those tours to turn into “Now Open” signs — a process delayed even more by supply chain disruptions and staffing woes — but there are reasons to be optimistic, Gallivan said.
Boston Properties — which owns the Prudential Center — agrees. New tenants have spoken for about 222,600 square feet of retail space over the last 10 months, according to Bryan Koop, Boston Properties’ executive vice president for Boston. That’s about one-third of the massive shopping center. Newcomers include Clover Food Lab, Swiss chocolatier Laderach, and Canadian fashion brand Oak + Fort. And there are constant rumors of a national retailer lined up for the empty Lord & Taylor.
“This influx in activity is a true testament to the resilience of the Back Bay business community and proof that brick-and-mortar retail is still very relevant to today’s shopper,” Koop said in a statement. “We’re confident that leasing and traffic activity in Boston will continue to be reenergized as area workers return to office and domestic and international tourism returns to pre-pandemic levels.”
The pandemic brought on an initial wave of notable closures, including the Lord & Taylor department store and Max Brenner chocolate restaurant. Other spaces — such as Crate & Barrel — closed to make way for new development that’s in the works.
Still, new restaurants keep coming, providing more options for office workers and college students.Boston’s first Chick-fil-A opened in January in a former Boloco location, and Raising Cane’s fried chicken will open this fall in space once occupied by The Forum, a restaurant that was steps away fromone of the blasts during the 2013 Boston Marathon bombing. National fast-food chains aren’t fancy, but — like banks and pharmacies — can afford the high rents and they fill a need.
Other tenants have moved in because COVID created an opportunity to snag prime real estate during a period when landlords were eager to negotiate. That’s how Cafe Landwer found its way into the ground floor of The Charlesmark Hotel, signing a lease in late 2020.
“It was almost impossible to get on Boylston Street before the pandemic,” said Nir Caspi,chief executive of the Mediterranean cafe chain.
Caspi had been looking for some time to expand beyond Cafe Landwer’s two other Boston outposts and set his sights on a Boylston address. It has been worth the wait. Since opening the 175-seat cafe in January, Caspi said, sales so far are exceeding expectations — running about 20 percent above projections. Business is robust, he said, because of a combination of dine-in customers, take out, and corporate catering for companies enticing workers back to the office with breakfast and lunch.
But it has been an altogether different experience for Clover Food Lab, which opened one location on Boylston right before the pandemic and one inside the Pru last fall. The local plant-based chain had expected sales to grow steadily by relying on office workers eating there three or more times a week.
COVID changed those plans.
“Our bread and butter is office workers,” said CEO Ayr Muir. “It’s slowly improving … but we still have a long way to go.”
He fears the future of Boylston Street will be big national chains that can weather a long, drawn-out recovery. That leaves small business owners like him hoping they can hang on for better times.
“We’re braced for another year or two of things coming back slowly,” said Muir. “Maybe we’re wrong, and it comes back faster.”
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