Astoria – Still a Safe Haven for Small Businesses?

With a surge of former Manhattanites inhabiting the neighborhood and with rent being in a fierce and constant upswing, Astoria’s small businesses have had to adapt accordingly.

“Our clientele has definitely changed, Astoria has changed, from being a family neighborhood to a more gentrified and kind of artsy area,” said Andreana Verona, who has witnessed this shift in the 15 years she has run Supernova Tattoo.

Established businesses have had to work tirelessly to compete with leases that see no sign of peaking in their value.

“Seven or eight years ago the rent was around $6,000 [a month], now its around $12,000 to $13,000,” said Claude Cozos, who has owned an art and framing store for 12 years. “I don’t know, 5 years from now [the rent] is probably going to be three times this.” Although currently coping, the problem may get out of hand. “If [the rent] is too crazy [in 5 years] then of course I’ll have to think about retiring”

The retail real estate market in Astoria is also heavily influenced by the location of retail space, with the differences between rent prices in residential areas and commercial areas growing increasingly disparate.

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Steinway Street Station – Steinway Street is a major commercial street in Astoria witnessing the brunt of the rise in rents.

“I pay $2000 [a month] here, one block over [on a commercial street] this same space would’ve been $8000,” says Liza Fiorentinos, who has been running Luludi Living Art, a terrarium store, for three and a half years. According to a representative for Metropolis Realty, a local realtor in Astoria, commercial lease contracts have increased by up to 50 percent in value in the last seven to ten years, with an average price per square foot in a commercial district hovering around $80, double what prices were in 2010.

The severity of the situation is illustrated by how many of the leases signed by these businesses, if ended for whatever reason, would lead to an immediate surge in rent value.

“If I were to leave my five year lease, right now, the rent would probably double,” elaborated Mr. Cozos. This would result in a rent value of around $24,000 a month for an 800 square foot space such as his, strikingly close to the current average price per month for retail space in the Flatiron district of Manhattan, as reported in The Real Estate Board of New York’s 2015 Spring Retail Report.

The influx of young professionals, however, has also resulted in Astoria becoming a potentially fertile ground for small businesses.

“I know that many young people are moving into the area – many without automobiles, which is good for local business since there are few chain stores and no big shopping malls that compete with small business,” said Seth Rogovin, of SCORE, an organization that offers advice to small businesses voluntarily.

Established businesses have noticed this shift towards increasingly gentrified clientele hailing from Manhattan, which while providing business, inherently raises the cost of living in the area and as such the cost of running a business.

“With Manhattanites coming this way everything goes up, your rent goes up, your cost of goods goes up,” said Mrs. Fiorentinos. The statements of gentrification echo through every business. “It used to be older people who would come in and shop but now its more and more young people who come in to look and buy art,” said Mr. Cozos.

These events have led to Astoria witnessing the opening of shops it wouldn’t usually boast.

“Now I’m seeing cool shops come to Astoria, bike shops, Buddhist shops, record stores, juice bars.” said Mrs. Fiorentinos. This trend is visible, with HiFi Records opening up just 3 months ago and already generating significant support and revenue from the local community. “There is no other record store around here” said owner of HiFi Records Javi Velásquez, yet the support for the store is substantial, with the store already having hosted several highly attended small free concerts.

The small business climate in Astoria is changing rapidly, let’s see where it goes.