Chittenden County’s Commercial Vacancy Rate Has Doubled Since 2019
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The vacancy rate for retail and restaurant real estate in Chittenden County has doubled since 2019, a sign that the pandemic and online shopping are hitting retailers hard.
The retail property market was weak before the pandemic, said Tony Blake, the principal agent for Burlington real estate firm V / T Commercial. Parking problems and safety concerns have put customers off downtown Burlington for the past several years. Online shopping has affected brick and mortar retail everywhere for about a decade.
Then COVID-19 security measures closed stores and restaurants altogether in 2020.
“It was almost like the perfect storm,” said Blake. “COVID really blew this thing up and retail took it on the chin.”
The percentage of unlet retail space in Chittenden County rose from about 5 percent in June 2019 to 10 percent in June 2021, said Brad Minor, a director of Burlington firm Allen, Brooks and Minor. He found that two very large properties were vacant: a former Hannaford store in Burlington and the former Sears store in South Burlington. Without these two properties, the vacancy rate in retail would be around 7.1 percent.
This rate shows that some companies have been better able to adapt to pandemic-related restrictions than others.
“In a way, it’s healthy; it’s not as bad as some have imagined, ”said Minor. “E-commerce is a challenge, and it is a challenge to operate in the post-pandemic retail world. Some companies have been really successful in figuring out what people want now that we are living life differently. ”
The full business impact of the pandemic is not yet fully understood. While it is clear that thousands of jobs have been lost, it is less obvious how many companies have shut down due to the pandemic closings, security measures and changes in consumer behavior. The Public Assets Institute in Montpelier released a report on Friday that Vermont suffered a net loss of just 75 companies between March 2020 and March 2021.
The report, which is based on data from the Bureau of Labor Statistics, says 2,400 Vermont businesses closed during the pandemic. But almost all of them have reopened, likely thanks to billions of dollars in federal grants created to help businesses survive, the report said.
The survey Minor uses for its property reports includes Williston, which offers a different shopping experience than downtown Burlington: one with lots of parking and few of the police challenges that downtown shopkeepers have cited.
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“It seems a little more sketchy than it used to be,” said Anya Huneke, who owns Dirt Chic, a downtown consignment store. She said she noticed more people in the store who seem to be struggling. “I’m more aware of the intentions and activities of people in the store than I used to be,” she said. “I feel like there is less supervision.”
At Dirt Chic, however, business is going well, said Huneke; she has many customers and more clothing shipments than she can use. She said the biggest barrier to her business right now is the lack of skilled workforce, and she thinks this is hindering other businesses as well.
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Even though businesses have fully reopened, COVID-19 still plays a huge role in consumer choices. The state’s infection rate is higher than ever, and while vaccinations make many people feel safer, Huneke says, some of her customers tell her that they are still suspicious of entering stores.
“We still have people who come and say, ‘This is the first time I’ve been in a store,'” she said. “Or we have people who drop off a shipment and say they are waiting outside.”
Blake is optimistic that Burlington will continue to attract local or regional businesses and that the surrounding towns will attract chain stores and restaurants. He said downtown Burlington typically doesn’t have any retail vacancies this time of year, but it does have some this fall.
But “it’s certainly a lot better than it was 12 months ago,” he said.