Thursday, June 09, 2011
NYC - Going Down...
This may shock Floridians, Nevadans, and the 10 people still left in Detroit...
But New York City hasn't really experienced any economic woes yet. Due to its political connections and access to Bernanke's runaway printing press, Wall Street has continued to quietly boom.
HOWEVER, recently, and I mean very recently like in the past 1.5 months, commercial *for rent* signs have appeared everywhere.
Again, Floridians by now are accustomed to half-filled plazas and malls but it's a new and scary development here on Long Island where I live. Certainly, when NY topples it will mean another leg down for everyone else - no matter how deluded they are that they already saw the bottom!
Of course retail rents are waaaay too expensive and store space is waaaay over-supplied, still. Tiny stores need to make $200 IN PROFIT, EVERYDAY, just to cover the rent, never mind pay the utilities, insurance, the workers, etc. Obviously the spate of store closings implies that consumers in these parts are cutting back.
Even the oldest yacht club in the country, right down the street for me, is boarded up and for sale:
$4 million bucks?
I figure you'd need 400k a year in income to carry a property like that. Obviously it's already failed as a social/yachting/pool club but that's what it's designed for. PLUS right next to it are two other, similar yacht clubs including the one my first wife and I were married in.
$400,000 per year divided by 12 months = $33,333 per month in overhead.
It's a terrific location for say a new private school. I could charge 20 kids $1,500 a month (cheaper than daycare!) or more...
I could pimp out the facility for a wedding or two per month for another $10,000...
I could rent the moorings out if there are any boaters left....and maybe even run a for-profit pool club in the summer - although there are a million pools out here already.
For all that risk, maybe, MAYBE I can earn 100k per year.
Obviously a lower purchase price is needed. Or I'd need some wealthy benefactor to donate much of the purchase price. I'd happily call it Old Coot Academy!
Whatever. There's going to be a whole lot of tantalizing retail/commercial renting opportunities in the next few years - as NYC real estate drops 30+%.