In cities across the country, ground-floor retail spaces often remain empty for years, even after the apartments or offices above them have been fully occupied. Ann Ehrhart, founder of EVERSTREET in Boston, Massachusetts, says the root cause is rarely what developers assume. "Ninety-nine times out of one hundred, when retail is chronically vacant or challenged or turns over, something in that equation is sick," Ehrhart said. The equation she refers to is merchandising, design, and underwriting. When these three elements are out of sync with each other or with the location itself, vacancy follows.
Ehrhart’s firm specializes in diagnostic work for projects where retail is underperforming. The process involves reverse-engineering what went wrong, using a framework that identifies which of the three levers—merchandising, design, or underwriting—is problematic. "Sometimes it’s one, sometimes it’s multiple," she said. For instance, a space may be designed in a way that doesn't accommodate the right kind of retailer, or the rent structure is so far off that no tenant can make the numbers work. Even when all three are internally consistent, they might be built for a Destination corridor when the property actually sits in an Untested one.
Once a storefront sits empty long enough, it can develop what Ehrhart calls a "vacancy stigma," which makes it even harder to lease. But she insists that a space can be brought back from the brink if the underlying problem is understood. "You absolutely can bring a space back from the brink of that stigma, but you can’t do it without understanding what went wrong," she said. The risk is trying to fix the symptom instead of the cause. She regularly sees owners who have cycled through several leasing teams without changing outcomes. Swapping brokers while keeping the same underlying strategy tends to produce the same results.
For developers and asset managers dealing with dark storefronts, Ehrhart’s advice starts with diagnosis, not action. Before bringing in a new leasing team or dropping rents further, the merchandising, design, and underwriting need to be evaluated together and measured against the specific corridor type—Destination, Convenience, or Untested—since location is the one thing that cannot be changed. Rent reductions alone rarely solve the problem if the underlying mismatch is about tenant fit or corridor classification rather than price.
Even seasoned developers underestimate how expensive and irreversible retail decisions are, and how hard outcomes are to predict without a structured process, Ehrhart said. "Retail decisions are very expensive and irreversible, and outcomes feel almost impossible to predict," she noted. That is why she built a predictive modeling approach around market demand and location context, so decisions can be evaluated up front instead of diagnosed years later. For those facing chronic vacancy, the message is clear: the fix is rarely a new broker or lower rent; it requires figuring out exactly which piece of the equation is out of alignment with the corridor the property actually sits in. EVERSTREET, led by Ehrhart, is a Boston-based retail leasing, strategy, and activation advisory. Learn more at everstreet.co.
