Why Ground-Floor Retail Stays Empty and How to Fix It, According to a Boston Advisor

In nearly every city, one can spot a ground-floor retail space that has remained vacant for years, even as the residential or office units above it are fully occupied. Ann Ehrhart, founder of EVERSTREET in Boston, Massachusetts, observes this phenomenon regularly and contends that the cause is rarely a single factor but a systemic issue. "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 the equation as the interplay of merchandising, design, and underwriting, which when misaligned with each other or with the location's corridor type, leads to vacancy.

Ehrhart's firm specializes in diagnostic work for projects where retail leasing is underperforming. The process reverses her typical five-step framework, essentially reverse-engineering what went wrong. Sometimes the tenant outreach targets the right kind of retailer, but the space design cannot accommodate them. Other times, the space and tenant mix are correct, but the underwriting—rent structure and terms—are so skewed that no tenant can make the numbers work. In still other instances, merchandising, design, and underwriting are 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 said. "Sometimes it's one, sometimes it's multiple."

Once a storefront has been empty for an extended period, it can acquire what Ehrhart calls a "vacancy stigma," a reputation that complicates future leasing. However, Ehrhart insists that recovery is possible. "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 danger is addressing the symptom rather than the cause. She often hears from owners who have engaged multiple leasing teams without success. Merely switching brokers while retaining the same underlying strategy typically yields the same results.

For developers and owners with dark storefronts, Ehrhart advises starting with a diagnosis rather than immediate action. Before hiring a new leasing team or slashing rents, the merchandising, design, and underwriting should be evaluated collectively and benchmarked against the corridor type—Destination, Convenience, or Untested—since location is immutable once construction is complete. Rent reductions alone rarely solve the problem if the mismatch lies in tenant fit or corridor classification.

Even experienced developers often underestimate the cost and irreversibility of retail decisions, as well as the unpredictability of outcomes without a structured process. "Retail decisions are very expensive and irreversible, and outcomes feel almost impossible to predict," Ehrhart said. This realization motivated her to develop a predictive modeling approach based on market demand and location context, enabling upfront evaluation rather than post-hoc diagnosis.

The core message for those dealing with chronic ground-floor vacancy is that the remedy is not as simple as a new broker or lower rent. It requires pinpointing which component of the merchandising-design-underwriting equation is misaligned with the corridor. EVERSTREET, led by Ann Ehrhart, a 20-year retail leasing veteran, offers advisory services for mixed-use developments in Boston and emerging markets. For more information, visit everstreet.co.