The ongoing discussion about the merits of the Picture Main Street project (of which there are many) has brought special attention to the state of Northampton’s downtown, especially the number of vacant properties. As someone who has been intimately involved in all aspects of the Northampton real estate scene for over 50 years, with a special focus on downtown, I’d like to add some historical perspective and some on-the-ground facts to this discussion.
The health of our downtown real estate market has moved through many cycles over the years, affected by interest rates, recessions, bank failures, pandemics, and the investment behavior of particular real estate owners. But the fundamentals of our downtown — its proximity to attractive residential communities, the stabilizing influence of Smith College and Cooley Dickinson Hospital, the many visionaries and committed property owners, our location off of I-91, Amtrak rail service, a supportive city government, among other things — has meant that our downtown economy is resilient. It’s never down for too long.
Over the years, my team has conducted occasional door-to-door surveys of downtown commercial spaces. In 2019, before Covid, we found there were 307 storefronts and first floor office spaces between Main Street and Market/Hawley streets and State Street (within the Central Business zoning district). At that time 36 of those spaces were vacant, or 11.7% vacancy. This past July, we conducted another survey of the same properties. There were again 307 storefronts and first floor office spaces. Of those, 24 were vacant, or 7.8% vacancy.
There will always be vacancies. It’s part of the normal churn of businesses. Our vacancy rate downtown is consistent with a normal pattern of businesses which come and go for a variety of reasons.
When we hear doom and gloom assessments about the state of our downtown, it’s important that we understand historical patterns and assess them against our current reality.
It’s certainly true that the perception of our downtown’s health is heavily influenced by vacancies in prominent locations, which leaves an impression that doesn’t necessarily coincide with the overall condition. Each of those prominent vacancies has its own complicated backstory that makes them unrepresentative of the state of downtown in general.
I would also like to fact-check the assertion that the “problems” of our downtown are caused by greedy landlords holding out for rental rates that are unaffordable to many businesses. The reality is that the average price per square foot of downtown retail space this year hovers around $25psf. The benefit we have now versus the beginning of my career 50-plus years ago is that we have computers that store data. $25 per square foot is exactly where rental rates were in 2000. It’s true that the many other costs of occupancy passed on to tenants by their landlords — taxes, maintenance, utilities, etc. — have risen substantially over that time, as they have for all of us. But it is simply not true that the dollars landlords are charging have risen dramatically. With one glaring exception, downtown property owners prefer occupied space at reasonable rental rates to unoccupied space left vacant.
I have observed two trends which, I believe, are good news for the economic health of our downtown. One is the generational turnover of many properties and businesses, bringing younger ownership, new energy and fresh ideas to our downtown. Related to this is the pattern, I see merchants who have diversified their revenue by adding a substantial online presence. Such merchants benefit from the visibility and street traffic of a downtown location but additionally have the steadying benefit of e-commerce.
There can be no doubt that the Picture Main Street project will present challenges, and that some businesses will be temporarily affected. But I think it’s important that there be a fact-based understanding of the real estate realities of our downtown as this project is undertaken.
Patrick Goggins is a longtime Northampton Realtor and former city councilor.