Monday, May 2, 2011

Restaurant Space in Penn Quarter comes at a premium

Penn Quarter has undoubtedly become the restaurant epicenter of Washington.  With anchor favorites and new restaurants coming every day, it seems like everyone is always talking about Penn Quarter.

The Washington Post did a story on restaurants in Washington, and the high demand for real estate in Penn Quarter.

They report that Fiola's Fabio Trabocchi started negotiating the lease for his Indiana Avenue space in January 2010, and negotiations were not easy.

Retail broker Tom Papadopoulos told the Post that restaurant space is $45 a square foot in Penn Quarter, and near the Verizon Center it can be as much as $100 per square foot.

“Restaurant space is hard to come by in the city,” Papadopoulos told the Post. “Landlords are able to pick and choose, and they’re looking for moderately priced, hip and cool restaurants.”  That seems like good news for Penn Quarter.

Nonetheless, the former SoHo space at 9th and E has been vacant for years.  There is vacant property across the street, too.  Only half of the space at 624 E Street is being taken by Luke's Lobster's.  Other spaces, such as the Wagamama space on 7th Street are leased and presumably payments are being made, yet they are still vacant.

Are landlords asking for too much in these properties and depriving themselves of the rental income?  Or is the demand overstated?

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