NEW YORK, NY.- Broadway is struggling through a postpandemic funk, squeezed between higher production costs and lower audience numbers just as a bevy of new shows set sail into those fierce headwinds. At the same time, New York’s off-Broadway nonprofits, long essential seedbeds for many of the nation’s most acclaimed playwrights, are shedding staff, programming and even real estate.

But there is an unexpected bright spot this season. Commercial off-Broadway, a small sector of New York’s theatrical economy and one that has for years been somewhere between difficult and dormant, is back in business.

“Oh, Mary!” a madcap comedy that imagines Mary Todd Lincoln as a daffy alcoholic, is selling out nightly at a 295-seat theater in the West Village, and is likely to transfer to Broadway this summer. Eddie Izzard’s solo “Hamlet” did well enough at a 199-seat theater in Greenwich Village that it relocated to a 349-seat house in the East Village, and next is planning runs in Chicago and London.

A commercial revival of “Danny and the Deep Blue Sea,” an early John Patrick Shanley play about two misfits who meet at a Bronx bar, had a profitable run downtown this season thanks to its two stars, Aubrey Plaza and Christopher Abbott. A new play, “Job,” featuring two “Succession” alums, rode word-of-mouth to profitability, and is also exploring a Broadway transfer.

And a pair of good-time musicals, “Little Shop of Horrors” and “Titanique,” have settled in for open-ended off-Broadway runs.

“It’s interesting, because up to the pandemic, I think people had written off commercial off-Broadway entirely,” said George Forbes, executive director of the Lucille Lortel Theater, which develops, presents and champions off-Broadway work. “The narrative was that it wasn’t financially viable. Commercial theaters were disappearing, and the not-for-profits were building new spaces.”

Now the tables have turned, although with plenty of caveats. Real estate is a limiting factor; there aren’t that many rentable off-Broadway venues with sufficient seating capacity for profit-minded producers. One long-running commercial off-Broadway hit, “Stomp,” closed last year after a 29-year run, and another, the immersive “Sleep No More,” is planning to close next month. And a number of factors could drive up costs: IATSE, the union representing stagehands, has been organizing off-Broadway crews, and Actors’ Equity Association, representing performers and stage managers, will begin negotiations later this year on a new off-Broadway contract.

The commercial off-Broadway boomlet seems to have been spurred by the success of “Little Shop,” a revival of the classic camp horror musical, which opened at the Westside Theater in 2019 and, with a long interruption caused by the pandemic, has been running since.

“Little Shop” is running in Midtown West, but most of the other new commercial off-Broadway successes are downtown, and that seems to be a key ingredient in their appeal.

“There are several generations of potential audience members who will not go above 14th Street for their Friday or Saturday or even Tuesday night out,” said Heather Shields, a founder of Business of Broadway, an organization that offers courses about theater producing. “Broadway has yet to capture their imagination,” Shields said, “but downtown is doing that very successfully.”

A vibrant commercial off-Broadway sector existed decades ago, but it shrank as the nonprofit theater movement grew, providing a home for adventurous art. It also contracted as Broadway surged, providing the temptation of bigger audiences and higher profits, and as some venues were lost for more lucrative real estate uses. In more recent years, there have been some successes — long-running entertainments like “Blue Man Group,” as well as a stream of television parody shows, murder mysteries and other fun-night-out shows that straddle the worlds of comedy, magic, nightlife and theater.

The new commercial off-Broadway ventures vary in content and tone but share the promise of an intimate experience (the houses are small, so the patrons tend to be close to the performers), a hip neighborhood (better restaurants and bars) and some kind of intangible quality of authenticity. The audiences are often younger, more local and more diverse than those on Broadway.

“There’s a genuine enthusiasm for going and discovering something off the beaten path,” said Lucas McMahon, a producer of “Oh, Mary!”

Producers and investors are finding themselves drawn to off-Broadway for several reasons. The primary one is economic: Production costs on Broadway have skyrocketed since the pandemic, making it significantly harder for shows to achieve profitability there, and causing producers and investors to look for lower-cost alternatives. (Many are also turning to Britain, where production costs are lower.)

How big are the cost differences? “Oh, Mary!” which has five actors, period costumes and several set changes, cost $1.2 million to capitalize off-Broadway. By comparison, “The Shark Is Broken,” a three-character comedic look at the making of “Jaws” that was set entirely within a small fishing vessel, cost $5.15 million to capitalize earlier this season on Broadway.

The challenge is that the potential upside of off-Broadway is also lower, because the theaters are smaller.

Historically, off-Broadway tickets have been less expensive than tickets for Broadway shows, but these commercial hits have engaged in the same dynamic pricing practices as Broadway shows — meaning tickets are more expensive when they are more in demand. “Oh, Mary!” has a top price of $191. (That’s still vastly less than the top priced ticket on Broadway, which is $649 at “Merrily We Roll Along.”)

“It is true you can’t make a fortune off-Broadway unless you run for years and years, but with the right equation there’s a pretty good chance you can get your money back and make a little,” said Greg Nobile, one of the producers of “Danny and the Deep Blue Sea.”

The dire straits confronting the nonprofit theater sector also contribute to the interest in commercial off-Broadway.

“As the nonprofits have had to produce far less, instead of waiting to be produced, theater artists are taking careers into their own hands and doing it their way,” said Leigh Honigman, one of the producers of “You Don’t Have to Do Anything,” a small play that ran off-Broadway earlier this year.

Because multiple nonprofit theaters are now saddled with underused theaters, the boundaries are blurring. Money from commercial producers is often used to finance shows at nonprofit theaters, and nonprofit theaters are increasingly renting their spaces to commercial producers. The Lucille Lortel Theater, for example, is run by a nonprofit foundation, and until the pandemic rented only to nonprofit productions. Then it decided to rent to commercial productions as well, and now that is where “Oh, Mary!” is running.

When actress Annaleigh Ashford reached out to producer Aaron Glick for help breathing more life into “The White Chip,” a play about alcoholism recovery that stars Joe Tapper, her husband, they quickly found a home for their commercial production at MCC, a nonprofit theater. “We didn’t want to wait for a nonprofit season — we wanted to carve our own path,” Glick said.

The potential growth of commercial off-Broadway is limited by a shortage of available downtown theaters with several hundred seats. Over time, theaters have been lost to redevelopment, and in recent years the Minetta Lane was taken over by Audible (which has become a very active commercial off-Broadway producer at the theater) and the Cherry Lane was bought by the indie film studio A24 (which has yet to resume programming at the building).

“It’s pretty clear that commercial off-Broadway is back and viable — it’s just hit after hit that we’re seeing — but the problem is that there are no spaces,” said Oliver Roth, who last year produced an impossible-to-get-into adaptation of “Uncle Vanya” (staged at first in a 40-seat loft and then in a 95-seat space) that turned a profit. “I would have run that forever if there wasn’t a mattress company coming in for New York Fashion Week to use the event space we were in.”

There are other challenges too. It’s harder to get press coverage for off-Broadway shows, and they are not eligible for Tony Awards, another potential source of attention. But with fewer seats to sell, it’s easier to have sold-out houses, which creates a sense of scarcity that can help fuel box office demand. Some of the shows have underwhelmed critics but have thrived nonetheless.

“Twenty to 30 years ago you had to hope for reviews, and then word-of-mouth kicked in over four to six weeks,” said Arnold Engelman, a longtime producer of Izzard’s shows, including the current “Hamlet.” “Now, word-of mouth is immediate — you have 200 people in there, and after the show a large number of them rush to their phones.”

Producer Daryl Roth (no relation to Oliver Roth), who owns the commercial off-Broadway theater that currently houses “Titanique,” said one sign of health is that she keeps getting calls from producers looking for space. “There are more productions looking for homes than there ever have been,” she said.

This article originally appeared in The New York Times.