Palo Alto's University Ave. among hardest hit on the Peninsula
Palo Alto's downtown area, once a modest drag with servicey stores, like button shops and hardware stores, transformed into a booming high-end retail area during the last decade, partly in response to Palo Alto's increasingly wealthy residential base.
But the outlook for the downtown area isn't so pretty now. The vacancy rate on University Avenue, the main street in downtown Palo Alto, is up to 10.9 percent, according to an informal survey conducted by the Palo Alto Daily News. And that's well above Mountain View's Castro Street (4.3 percent) and Los Altos' Main Street (5.4 percent), according to the paper. The vacancy rate on University Avenue is, however, much lower than Palo Alto's Bryant Street, where it's up to 35 percent, after a few boutiques and a couple art galleries were forced to close.
Part of the problem, according to one local real estate expert, is that Palo Alto landlords took too long to cut rates. Lease rates in the Bay Area didn't "drop substantially" until the third quarter of 2008, and in Palo Alto, rates didn't drop until the fourth quarter of 2008, Anita Ghai, Bay Area research manager for CB Richard Ellis, told the Palo Alto Daily News.
| August 19 2009 at 11:55 AM
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