Report: Short-Term Commercial Leases Threaten Local Economies, Culture

Retails stores that move in downtown in the summer and vacate by fall may leave the year-round economy in Southampton and East Hampton in tatters, The New York Times reports.

Though the tail end of the recession suggests long-term leases may be recovering, experts warn the Hamptons may not be out of the woods, according to the report.

Summer "resort communities" such as the Hamptons have discovered that many retail stores are following the seasonal migration pattern of the town residents, opting for short-term leases, usually in the summer, that expire at the end of the season.

These retail stores, such as , take on the short-term leases as a way to test the market, The New York Times reports. Yet facing uncertain economic times the stores often choose to vacate the area at the end of the summer season, leaving holes on Main Street and threatening to deplete the commercial real estate market. 

It is a trend that began at the onset of the recession that experts forecast will continue, though possibly less frequently, according to The Times.

Prices have dropped by as much as $90 per square foot in East Hampton and $30 per square foot in Southampton, but rent continues to cut into profits so sharply it has forced many year-round stores and restaurants to reconsider.

Struggling to fill these vacancies and hold the fort, landlords are forced in greater numbers to agree to short-term leases, a dangerous vicious cycle that affects the economy, and the local culture as well, The Times reports.

See the article at nytimes.com.