Walking through almost any city, one can spot a ground-floor retail space that has remained vacant for years, even as the residential or office units above are fully leased. Ann Ehrhart, founder of EVERSTREET in Boston, Massachusetts, observes this recurring issue and contends that the root cause is often more specific than 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. She refers to a critical equation involving 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 the retail plan is underperforming. Her process runs in reverse from her usual five-step framework, essentially reverse-engineering what went wrong. Sometimes tenant outreach targeted the right retailers, but the space was never designed to accommodate them. In other cases, the space and tenant mix are suitable, but the underwriting—rent structure and terms—are so misaligned that no tenant can achieve financial viability. Additionally, merchandising, design, and underwriting might be internally consistent but tailored for a “Destination” corridor when the property actually sits in an “Untested” one.
“We always, in a diagnostic exercise, project assignment, 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 explained. “Sometimes it’s one, sometimes it’s multiple.”
Once a storefront remains empty for an extended period, it can develop what Ehrhart calls a “vacancy stigma,” a reputation that makes leasing even harder. However, Ehrhart believes this is not necessarily a sunk cost. “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 lies in treating the symptom rather than the cause. Ehrhart frequently hears from owners who have cycled through several leasing teams without changing outcomes; swapping brokers while retaining the same underlying strategy tends to produce identical results.
For developers and asset managers facing dark storefronts, Ehrhart’s advice begins with diagnosis, not immediate action. Before hiring a new leasing team or slashing rents, the merchandising, design, and underwriting must be evaluated together and measured against the specific corridor type. Rent reductions alone rarely solve the problem if the underlying mismatch involves tenant fit or corridor classification rather than price. Ehrhart’s framework classifies corridors as Destination, Convenience, or Untested, treating the corridor as the fixed variable because location cannot be altered after construction.
Even experienced developers often underestimate how costly and irreversible retail decisions are, and how unpredictable outcomes can be without a structured process, Ehrhart noted. “Retail decisions are very expensive and irreversible, and outcomes feel almost impossible to predict,” she said. This insight drove her to develop predictive modeling around market demand and location context, enabling informed decisions upfront rather than years later.
For stakeholders dealing with chronic ground-floor vacancy, the takeaway is that the fix is rarely as simple as a new broker or lower rent. It requires identifying which component—merchandising, design, or underwriting—is misaligned with the corridor in which the property operates. EVERSTREET, led by Ehrhart, is a Boston-based retail leasing, strategy, and activation advisory serving mixed-use developments in the Boston area and emerging markets. Learn more at everstreet.co.
