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Monday
Jan082007

Affordable real estate for small business

As redevelopment replaces old, decaying buildings, local business is often replaced with large chains and franchises.  I would speculate that this is in part because the new construction demands much higher rents. Similarly, I would speculate that many cherished local retailers might be hard pressed to stay in business if they had to pay rent--that is, if they hadn't already owned their buildings for generations.

Likewise, in new development, we often find only large corporate retailers, at least until certain spaces prove to be unleasable.

As an example, in my town of Fishers, on the fringe of Indianapolis, one can rent a storefront in an old building for about $12/sf.  In a new building, you'd pay twice that, even in cases where the new construction has a higher density.

So, how can developers and urbanists be proactive in providing affordable places for entrepreneurs, mom-and-pops, ethnic/immigrant restaurants, and the like?

1) Business incubators, or for-profit office suites.  In downtown Fishers, Yeager Construction has built a two-story office suite building with 200 sf rooms available with six-month leases and shared conference rooms.  It has been a huge success.  Among the more typical tenants is a hair salon...not your usual "office suite" occupant.

2) Farmer's Markets.  Farmer's Markets are a great way to offer a low barrier-to-entry for startup businesses.

3) Live-Work Units.  While retail below housing isn't always a low-rent opportunity, retail below YOUR housing is a better deal.  Live Work units are gaining momentum.  While the demand for them is somewhat low in comparison to the entire market, the supply is far lower.   These have become quite successful in Kentlands, MD; San Francisco; and are even being built in Carmel, Indiana.

4) Parking Lot Liners. Narrow "liner" buildings can create the street wall around a parking lot, and provide small spaces for rent to small business.  Likewise, the first floor street facade of any (and all) parking garages is a great opportunity for narrow, low-rent spaces.

denver_belmar%202005_018.JPG

Left: "Block 7" at Belmar, Colorado.  The Parking Garage is wrapped with small artist studios.  The studios make the street front safer and more lively.

 

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Left: This simple arcade in Leesburg, Virginia, serves as a Farmers' Market and surrounds a public green.  On this side of the green, it is simply a lean-to structure against a historic building.

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