Retail Store Front Changes in Dupont Circle – There is significant change occurring with Dupont Circle retailers and restaurants. Store closings, such as Best Cellars, have outnumbered openings like Kabob Ji.
An unusually large number of “for lease” signs now dot Dupont Circle. The Historic Dupont Circle Main Street organization has counted over 26 vacancies in February 2010.
Factors explaining large number of vacancies include:
- The slowing economy has finally caught up with struggling retailers. Some Dupont retailers who began in 2007 during the onset of the recession, valiantly hung on through much of the recession but simply have run out of time to recover.
- Certain landlords over paid for buildings and the Performa rents were above market. For over two years, starting in 2007, the owners of Grosvenor, held onto a vacant space at 2029 P Street NW without lowering the asking rent of $ 55 per square foot plus $17 in pass-through’s.
- Fewer qualified tenants are in the marketplace. Such tenants are being very particular about their choice of location. Landlords simultaneously are scrutinizing creditworthiness because of the opportunity cost and real dollar loss incurred through eviction.
- Renewal rental rate disagreements: Some Dupont landlords feel the rental rate should be higher than the existing tenant is willing to accept such as Best Cellars formerly located at 1643 Connecticut Avenue NW.
- Dupont has a high concentration of food uses and credit is very hard to obtain due to the economy and category risk profile. The lack of access to capital has forced tenants to hold off on expansion.
- DuPont landlords were hoping for national retailers to fill vacancies due to their stability and creditworthiness. However, they too have slowed expansion awaiting stronger economic fundamentals to emerge.
Despite the current vacancies, the DuPont area will be a long term draw for retailers due to a relatively low crime rate, residential density, and high disposable income.
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