The stretch of Walnut Street west of Broad will likely experience a rash of closures due to flagging performance and/or expiring leases, multiple retail brokers told Bisnow. While some landlords are looking forward to the opportunity to revamp long-occupied spaces and fill them with tenants more relevant to current trends, the turnover will be disruptive near term, and potentially damaging long term.
“It will absolutely affect traffic on the street and sales,” Colliers International Senior Managing Director Larry Steinberg said. “This is why in a shopping center, a lot of retailers have clauses in their leases that if anchors or certain other stores go dark, their rent changes or they have the option to leave.”
The 1700 block of Walnut Street in particular will have several stores vacating their properties in 2020 — adding to the closures of second-floor nightclub Coda and fast-fashion brand Zara in the past year. On the building that once housed Coda and has Wells Fargo on the ground floor, a sign has recently gone up advertising the entire building for lease, Steinberg said.
Chestnut Street has been gaining in popularity in recent years, especially for food and beverages this year, to the point where many consider it a part of Philly's "high street." A Center City District report that included both Chestnut and Walnut streets between Broad and 20th streets pegged the high street vacancy rate at 5.9% as of Q2 last year.