Ann Ehrhart
Founder and CEO, Everstreet
Age: 40
Industry experience: 18 years
Competition from e-commerce and the shake-up of tenancy during COVID forced landlords to reexamine assumptions about the role of retail space, particularly in mixed-use developments. Rather than seeking maximum rents, more landlords are seeking independently-owned shops and restaurants, including women- and minority-owned businesses that reflect the diversity of Greater Boston. Ann Ehrhart founded retail brokerage and advisory services firm Eversteet in late 2022 to fill the gaps in the traditional brokerage model that prevent deals from being consummated. A former broker with The Dartmouth Co. and Boston Urban Partners, Ehrhart represents Higher Ground Fitness and Boston-based Koko Cafe on expansion strategies, the owners of East Cambridge’s One Canal lab conversion on a pair of ground-floor availabilities, and is seeking a role working with municipalities on neighborhood studies and master plans.
Q: What was your vision for Everstreet’s business plan and brokerage model?
A: This is for the landlord or developer client who wants something different than your typical copy-and-paste retail plaza. Retail is changing, and it requires a new approach. There’s been studies about how much today’s consumers, particularly Generation Z and Millennials, want and demand diversity in small business. When I started over 18 years ago, retail was the most expensive space in the whole vertical stack. That’s really changed.
For mixed-use urban retail space, retail is becoming much more of an amenity. There’s been a lot of conversations about people looking at retail less on a dollar-by-dollar revenue basis, and more as an amenity component that can be used for community engagement and enrichment. There’s an opportunity for a unique and diverse mix of minority- and women-owned businesses.
Q: What are some of the more common reasons that a retail lease negotiation can’t get across the finish line?
A: One of the big ones is always a lack of funding. You’ll hear, `We only could get approved to put in so much tenant improvements,’ and the tenant didn’t have the network to do it with a friends-and-family raise, or didn’t have the collateral needed to walk into a traditional bank loan. One example where Everstreet can help is connecting them with funding sources that can bank unbankable clients, such as Eastern Bank’s Equity Alliance for Business. The problem can arise at either end of the life cycle of the deal. When you have a ground-up new building, it’s raw shell space where there’s a need for more attention to detail in the planning, and more hand-holding. Some of these groups have never managed a core-and-shell
buildout before: not just tenant improvements, but figuring out how to estimate soft costs. In Everstreet’s planning and advisory role, we can manage the process before and after the lease transaction. You have a lease signed, but the permitting didn’t come together. These are pressure points throughout the whole process of getting somebody up and running. And whether it’s grant money or lending sources, Everstreet can give the technical assistance.
Q: Since COVID, are retail landlords waiving more financial requirements or offering shorter lease terms?
A: Yes to both. How can we put the pieces together to connect these people to their funding? Retail and restaurant is a hard business, but it’s easier to get into a pop-up or an incubator space. The barriers to entry are low. To get to a lease, that’s where the barriers go way way up, and access to advice and guidance go way down. We’re hoping to increase the conversions of pop-ups to long-term brick-and-mortar.
Q: How strong has been the recent recovery in retail rents?
A: The biggest recovery has been in the established retail neighborhoods. It was this way going out of the Great Recession, too. Newbury Street rebounded, and you’re hearing comps with a $200 per square foot range. The neighborhoods have seen an uptick in activity since COVID, and the bedroom communities have been reinvented a little bit with people working from home. The Financial District’s retail is probably where you’ve seen a lot of creativity. What can somebody successfully do in sales volume, and what’s a healthy percentage for them to pay in rent? There’s a more transparent process.
Q: What are the best practices that have emerged for negotiations related to expanded outdoor dining?
A: Because we live in Massachusetts, it’s hard to charge rent per square foot for outdoor space. Mother Nature dictates how much of the year you’re getting to use it. My advice for both the landlords and the tenants is that the best way to handle it is to have a percentage rent component. Every so often, you’ll see a cool place with a roof and heaters, and that can be a different conversation.
Ehrhart’s Five Favorite Gluten-Free Bites
- Chocolate Chipwich at Jennifer Lee’s Bakery
- Lemon Blueberry Almond Muffin at LuLu Green
- Chocolate Chip Walnut Banana Bread at Mother Juice
- Ginger + Garlic Fried Rice at Myers + Chang
- Fruity Pebble Macas at Maca Boston
