New era for Newbury St. - by Matt Curtin

The urban retail landscape has been in serious flux for years now as technology, new consumer shopping behaviors, rising rents and e-commerce collide to “oust” traditional brick-and-mortar retail spaces (or so we’re led to believe). In Boston, Newbury St. has been at the epicenter of these conversations in recent months, and frankly, for years. Despite concerns that its ride at the top is over, the future of Newbury is not in question.

First, the retail apocalypse many fear is not at fault for current vacancies or turnover we’re seeing on Newbury. Retailers of a bygone era, who have failed to evolve with their customers, are being replaced by smarter, omni-channel focused brands. In fact, it has been the transformation and success of the enclosed malls in Boston like Boston Properties’ and Simon Property Group’s Prudential Center and Copley Place that have impacted the momentum on Newbury. Given that leasing at both of those centers is now substantially complete, we are likely to see things pick up again on Newbury St. 

Additionally, the high rents that landlords were able to achieve on Newbury St. four to five years ago have come back down and are at levels that allow both the building owners and the retailers to make a profit. There are over 400 storefronts on Newbury St., and the fact that there are as few vacancies as there are is remarkable when you consider the total number of active retailers in the country right now.

Newbury is also leading the way in new leasing models. Its high turnover is not something we should see as a negative. As new retailers seek to test or break into the market and determine the viability for long-term brick-and-mortar success, short-term agreements of six to 12-month are being signed before committing to a more long-term lease. We’re seeing many startup retail concepts such as Tie Bar, AUrate, State & Liberty, Alps & Meters, Daniel Wellington and Credo using this leasing model in pre-existing, popular retail spaces along Newbury St. Warby Parker and Bonobos both opened their first stores in the U.S. on Newbury Street as short-term test models, and today Bonobos has 48 stores nationwide and Warby Parker has 63. Newbury Street is not only engaging in new leasing models, but also bringing in a variety of tenants. 

While conversations around the demise of brick-and-mortar and the spike of vacancy rates make their way through the news cycle, Newbury Street continues to evolve and will remain one of the country’s most iconic and busy shopping districts.

Matt Curtin, senior vice president and partner at CBRE/New England, Boston, Mass.