Anonymous
09/27/2020 19:54
Subject: What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Anybody know why Chatter closed? Sounded like a great idea and it is concepts like this that the WaPo article is infering that the area needs. Food was nice and not super expensive.
I think the new owners, Tony Kornheiser and his friends, got bored.
The place really did need some remodeling/updating.
Anonymous
09/27/2020 19:51
Subject: What are the commercial lease rates are at Friendship Heights?
Have had an office in FH for 30 years. Lease up for renewal: Landlord wants over $50/SF/year with no allowance for covid impact. We're leaving.
My understanding is that landlords would rather not rent at all than lower the price, and the tax code supports this.
My understanding is that landlords would rather not rent at all than lower the price, and the tax code supports this.
Anonymous
09/27/2020 19:19
Subject: What are the commercial lease rates are at Friendship Heights?
The high end shops moving to City Center was a big deal. Friendship Heights has been losing its luster for years.
Anonymous
09/27/2020 17:41
Subject: What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Friendship heights used to have a nice mix of shops that did not survive the internet competition and the rents. Borders books used to be where dsw is now, Anna’s linen i think in the Nordstrom rack, and a few others.
Don’t know how much they pay but it’s too high for the shops to survive and for practical shops that families with kids in the surrounding neighborhoods would regularly shop in, particularly with the convenience and price competitiveness of online shopping.
I agree. There was a nice mix of mid to high level department stores as well as stores like Linens and Things and Borders where I often went weekly or more. Prior to the effort to posh it up, there were stores that met everyday needs. With the loss of Giant, that’s one less pharmacy, one less place to buy national brands. What’s left doesn’t meet every day needs — but also is unlikely to lure people in from other areas just to shop.
I think World Market, Nordstrom Rack, and Old Navy are a good balance for Bloomies and Saks, but I will seriously miss tha I gotta the Lord and a Taylor in the neighborhood.
Anonymous
09/27/2020 17:37
Subject: What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Then after Family housing is created they should lease to places like Jiffy Lube, dollar store, and gyms, karate studios, yoga studios. Starbucks with drive through coffee. Make it a place people can actually live.
People in this DC bubble love to hate their life.
I’d love to have these shops at friendship heights but they would not be able to afford the astronomical rents
Anonymous
09/27/2020 17:34
Subject: What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:When Williams Sonoma moved to Bethesda, I was sure that Sur La Table would go gangbusters. Interestingly I never went in there and saw it empty. It always seemed to have a pretty good crowd.
Sur la table corporate did go bankrupt and in reorganization closed half of its brick and mortar stores. It looks like this prime Wisconsin Ave location was fallout from that.
Interestingly, Williams Sonoma in Bethesda Row is so small that they have to store their stock in another location down the road, but they valued foot traffic so much that they opted to move down the road from their much nicer Mazza location, just to capture more foot traffic.
I think the parent company wanted the smaller WS , the Pottery Barn, and the PB kids stores close together. Bethesda does have more foot traffic - even without the Barnes and Nobles.
Anonymous
09/27/2020 15:20
Subject: What are the commercial lease rates are at Friendship Heights?
Lease and maintenance disputes drove out the Hot Pot place and the Burger Tap and Shake from Tenleytown. Replaced with a bank after a year or so of vacancy.
Anonymous
09/27/2020 14:44
Subject: What are the commercial lease rates are at Friendship Heights?
Somebody mentioned it earlier, but Cafe Delux in Tenleytown is the perfect illustration of this issue. Long time (25 year) tenant, lease was to be increased exponentially and they left. Now the space is empty for a year. I am sure it will be a TD Bank in no time.
Anonymous
09/27/2020 14:41
Subject: What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Giggle: Nationwide out of Business
Pottery Barn: Not sure why they closed
Range: Byian Voltagio claimed no foot traffic after three years
Williams Sonoma: Claimed no foot traffic in Mazza location (They moved to a MUCH smaller location)
Le Pain Quotidien: Ni idea why they closed (COVID)
Sur La Table: No idea why they closed
Chatter: The remodeling that is just never ending
H&M: How on earth did it not make it there?
PF Changs: COVID
Peet's: COVID
Elizabeth Arden/Red Door: No idea
Lord and Taylor: National closing
Neimans: National Closing
Elizabeth Arden had a terrible rebranding - to Mynd - and then closed all its locations.
Pottery Barn moved to downtown Bethesda.
Anonymous
09/27/2020 14:41
Subject: What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Anybody know why Chatter closed? Sounded like a great idea and it is concepts like this that the WaPo article is infering that the area needs. Food was nice and not super expensive.
It was bought by a few patrons, including a local newscaster, with no experience in the restaurant business. That's my guess as to why it failed so quickly.
Anonymous
09/27/2020 14:32
Subject: Re:What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Anonymous wrote:Don’t forget to factor in that landlords can write off a vacancy as a loss. That’s usually more valuable than renting for a reduced rate. They also use the rental rates to calculate the value of their buildings for refinancing—which they then use to build a new building somewhere else. If they base their business model on $100 a sqft but rent for $50, they’ve just reduced the overall value of their building.
You're looking at it on an accounting (accrual) basis, while ignoring cashflow.
If I have a building and owe $10k/month on the mortgage that I usually rent out for $20k, then choosing to bring in $0 instead of a reduced rent of $5k or $10k is going to drive me into bankruptcy cash-wise.
Now if you own the building outright, you're correct the loss may be worth it.
Yeah, I’m talking large developments, not individual building owners.
Anonymous
09/27/2020 14:28
Subject: Re:What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Anonymous wrote:Don’t forget to factor in that landlords can write off a vacancy as a loss. That’s usually more valuable than renting for a reduced rate. They also use the rental rates to calculate the value of their buildings for refinancing—which they then use to build a new building somewhere else. If they base their business model on $100 a sqft but rent for $50, they’ve just reduced the overall value of their building.
You're looking at it on an accounting (accrual) basis, while ignoring cashflow.
If I have a building and owe $10k/month on the mortgage that I usually rent out for $20k, then choosing to bring in $0 instead of a reduced rent of $5k or $10k is going to drive me into bankruptcy cash-wise.
Now if you own the building outright, you're correct the loss may be worth it.
This doesn’t fully explain it. Because pre covid, commercial landlords loved them some empty buildings. And they loved to raise rents to kick out long standing stores to keep the buildings empty.
There’s a special place in hell for commercial landlords. I fear the covid will not teach them a lesson.
Anonymous
09/27/2020 14:22
Subject: What are the commercial lease rates are at Friendship Heights?
When Williams Sonoma moved to Bethesda, I was sure that Sur La Table would go gangbusters. Interestingly I never went in there and saw it empty. It always seemed to have a pretty good crowd.
Sur la table corporate did go bankrupt and in reorganization closed half of its brick and mortar stores. It looks like this prime Wisconsin Ave location was fallout from that.
Interestingly, Williams Sonoma in Bethesda Row is so small that they have to store their stock in another location down the road, but they valued foot traffic so much that they opted to move down the road from their much nicer Mazza location, just to capture more foot traffic.
Sur la table corporate did go bankrupt and in reorganization closed half of its brick and mortar stores. It looks like this prime Wisconsin Ave location was fallout from that.
Interestingly, Williams Sonoma in Bethesda Row is so small that they have to store their stock in another location down the road, but they valued foot traffic so much that they opted to move down the road from their much nicer Mazza location, just to capture more foot traffic.
Anonymous
09/27/2020 14:03
Subject: What are the commercial lease rates are at Friendship Heights?
Anybody know why Chatter closed? Sounded like a great idea and it is concepts like this that the WaPo article is infering that the area needs. Food was nice and not super expensive.
Anonymous
09/27/2020 14:02
Subject: Re:What are the commercial lease rates are at Friendship Heights?
Anonymous wrote:Don’t forget to factor in that landlords can write off a vacancy as a loss. That’s usually more valuable than renting for a reduced rate. They also use the rental rates to calculate the value of their buildings for refinancing—which they then use to build a new building somewhere else. If they base their business model on $100 a sqft but rent for $50, they’ve just reduced the overall value of their building.
You're looking at it on an accounting (accrual) basis, while ignoring cashflow.
If I have a building and owe $10k/month on the mortgage that I usually rent out for $20k, then choosing to bring in $0 instead of a reduced rent of $5k or $10k is going to drive me into bankruptcy cash-wise.
Now if you own the building outright, you're correct the loss may be worth it.