The Rent Is Too Damn High: The 14th Street Edition

Returning to a running theme–business rents are too high–let’s look at D.C.’s 14th Street, NW (boldface mine):

It’s been hard to ignore the takeover that’s been happening along the 14th Street corridor. Slowly, independently and locally owned restaurants that helped transform the neighborhood into a dining destination are disappearing, while national chains and out-of-town restaurant groups take their place

It’s no secret that rising rents have been changing the landscape for some time now, but to dig a little deeper into what’s going on, I called veteran DC restaurant real estate broker Tom Papadopoulos. He says rents along 14th Street averaged around $40 per square foot a decade ago. These days? You’re looking closer to $75 to $90. (He’s seen as high as $100.) Restaurants that were part of the 14th Street boom, like Masa 14, are starting to come to the end of their 10-year leases, and, well, it’s hard to keep going when the market rent has doubled… unlike office-dense downtown, where landlords might be a little more generous because they make most of their money from the companies upstairs, 14th Street landlords with two-story buildings are more dependent on restaurant rent…

But for out-of-towners, it can be a comparative deal. “You come down from New York, you can pay half the rent and do three-quarters of the business and make money,” Papadopoulos says.

The ‘blanderization’ of gentrifying cities is often viewed through a moralistic lens. But as long as business rents keep rising, independent restaurants, especially affordable ones, will not be able to survive. All of the local businesses, not just restaurants, that provide character to cities will be wiped out, to be replaced by a monoculture that has little or no appreciation for what makes cities a home.

This entry was posted in Bidness, DC. Bookmark the permalink.

4 Responses to The Rent Is Too Damn High: The 14th Street Edition

  1. Chill says:

    Why are chain restaurants automatically more profitable? Why do locally owned businesses need a subsidy (essentially), to compete with them. I could see this argument if local restaurants were replaced by entirely different businesses, but the argument seems shaky if one restaurant moves out and another moves in and pays the higher rent and does fine.

  2. mr grumpy says:

    Newbury St in Boston is unrecognizable from when I was a student in early 80s. No local character to retail/dining at all. All geared to six and seven figure incomes.

  3. I know I say this over & over again, but it’s happening everywhere. There are sections of Buffalo that look like every other city in America … the same corporate restaurants, the same logos, the same old same old. It’s happening in Cleveland, Pittsburgh, Detroit, everywhere you look. Durgin Park in Boston closed! The rent was too high! Tourism has dropped off since 2016 … gee I wonder why.

  4. coloncancercommunity says:

    Small businesses are being driven out in droves even as retail rentals languish and stores remain unoccupied. Many landlords are “warehousing” their retail in anticipation of large franchises and won’t even CONSIDER a tenant that isn’t a franchise owner even if they have the money. I think municipalities could take action by fining landlords for warehousing retail space. If the store is vacant for more than 6 months, tax the $hit out of them for denying the municipality sales tax. Make sure the “pain point” is high enough to make it VERY unpalatable to leave the space vacant. When it gets too crazy expensive to leave 20-30% of your retail space vacant, the rents will come down – at least to a certain point. It would also stop landlords from “holding out” for a big franchise.

    Other things they could do is enact legislation that stipulates a certain percentage of local retail. I don’t know how that would work, I’m not an attorney. But municipalities have to start getting tough with landlords of both residential and retail space.

Comments are closed.