Our series examining how independent bookstores around the country have navigated rising rents, lease negotiations and relationships with landlords continues throughout the week.
Christine Onorati opened WORD Bookstore in Brooklyn, N.Y., in March 2007. Onorati had originally thought of opening a store in Williamsburg, Brooklyn, but even when she was looking for spaces back in 2006, the properties there were "unbelievably expensive." Her search took her to Greenpoint, just north of Williamsburg, which was described as being "on the cusp" 12 years ago and, according to Onorati, is still described in much the same way in 2018, though more restaurants and retailers have moved in since she opened.
She found a space in Greenpoint at a good rate, in a building that was bought and renovated by a young couple. Onorati renewed that lease two years ago without any issues, and reported that she has a great relationship with her landlords. "They were very fair with me," said Onorati. "They are very happy with me as a tenant. I'm very low drama and I've brought value to their apartments above me."
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| Word Jersey City | |
In December 2013, Onorati opened a second, larger WORD location, complete with a cafe, in downtown Jersey City, N.J. In many ways, she said, it was a similar situation to her moving into Greenpoint in 2007, with both areas being described as right on the cusp of a real estate boom. And although Onorati got a "good deal" on a building that had been vacant for years, the terms of the agreement made her responsible for the renovation and construction work needed to turn what had once been a Burger King into an independent bookstore.
"I would never, ever take on a bookstore construction deal like that again," she said. The construction and permitting process took much longer than expected, and the opening had to be delayed several times. "It cost us a lot of money."
In September 2016, around the same time that Onorati renewed her Brooklyn lease, she rented a space two doors down from her Greenpoint store with the plan of opening a children's store. At 550 square feet, the new space was smaller than her main store, and even after negotiating her new landlord down, Onorati was still paying "a ton more per square foot." Onorati calculated that the two stores together could make up for the additional costs, and the new landlord had agreed to handle construction, renovations and permits.
The plan was to open the children's store by February 2017, but even as late as December 2016 it became clear that the landlord did not have the necessary permits and certificates to begin the build-out. Nevertheless, Onorati was told that construction would begin "any day now," and ultimately spent more than six months fully staffed up and ready to open a new store. She officially pulled the plug on the children's store in January 2018, nearly a full year after it was supposed to open.
"It almost sunk me," said Onorati. "To me it's a perfect example of what New York City rents and New York City real estate can do to a retail establishment."
Onorati noted that these rising costs, including not just rent but also minimum wage and healthcare, have led to drastically changing her business model. She recalled that when one of her employees first suggested carrying socks several years ago, she thought it was a ridiculous idea. Now she sells "a sh-t ton of socks" and other items with high margins.
Onorati added: "You can't dig your heels in anymore. You have to be changeable and negotiable and rethink your model and [product] mix every day." --Alex Mutter