Across urban landscapes, vacant ground-floor retail spaces linger for years, even as residential and office units above them fill. Ann Ehrhart, founder of EVERSTREET in Boston, Massachusetts, attributes this persistent problem to a misalignment of three critical factors: merchandising, design, and underwriting. “Ninety-nine times out of one hundred, when retail is chronically vacant or challenged or turns over, something in that equation is sick,” she says.
Ehrhart’s diagnostic work focuses on retail projects that are underperforming. Her firm reverses the usual five-step framework to identify what went wrong. Common issues include targeting the right tenants but designing a space that cannot accommodate them, or having both space and tenant mix correct but underwriting terms that make profitability impossible. Sometimes all three are internally consistent but designed for a Destination corridor when the property actually sits in an Untested one. “We always, in a diagnostic exercise, take that formula, and we look at what the retail leasing strategy has been to date, and we diagnose which of those levers is problematic,” Ehrhart explains. “Sometimes it’s one, sometimes it’s multiple.”
Once a storefront sits empty, it can develop a “vacancy stigma,” making leasing even harder. However, Ehrhart insists recovery is possible if the root cause is addressed. “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 says. Owners often cycle through leasing teams without changing outcomes because they treat symptoms rather than causes. Swapping brokers while keeping the same strategy rarely yields different results.
For developers facing dark storefronts, Ehrhart advises starting with diagnosis, not action. Before reducing rents or hiring new brokers, evaluate merchandising, design, and underwriting together and compare them to the specific corridor type—Destination, Convenience, or Untested—since location is the only immutable factor. Rent reductions alone seldom solve the problem if the issue is tenant fit or corridor misclassification.
Even seasoned developers underestimate how costly and irreversible retail decisions can be. “Retail decisions are very expensive and irreversible, and outcomes feel almost impossible to predict,” Ehrhart notes. To address this, she developed a predictive modeling approach based on market demand and location context, enabling upfront evaluation rather than post-hoc diagnosis.
For those dealing with chronic ground-floor vacancy, the takeaway is clear: a new broker or lower rent rarely suffices. The fix lies in identifying which component—merchandising, design, or underwriting—is out of sync with the property’s actual corridor. EVERSTREET, led by Ehrhart, specializes in retail leasing, strategy, and activation for mixed-use developments across Boston and emerging markets. More information is available at everstreet.co.
