Why Landlords and Restaurants Better Play Nice
Barack Obama and Joe Biden. Stephen Strasburg and Wilson Ramos. Developers and restaurants. One of those partnerships might seem not like the others, but as we heard yesterday at our 4th annual DC Restaurant Development Summit, DC's retail and restaurant revolution won't go very far without landlords and business owners meeting halfway.
Busboys and Poets founder (and one time DC mayoral candidate) Andy Shallal has seen it all go down. As a locally grown restaurant concept, he says Busboys has sometimes been used as a pawn by landlords to attract bigger, national credit tenants. "Some landlords get it, and some try to hook you in, and then squeeze the hell out of you," says Andy, who adds that local concepts may not have the balance sheet of larger, national tenants, but contribute more to a community. So forging relationships with open-minded landlords is crucial in the growth of startup local concepts, and as a result, the growth of the emerging neighborhoods, he says.
That camaraderie should exist between business owners, too, says DC Brau CEO Brandon Skall (with Vucuverich Simons Advisory Group's Dan Simons). He says local restaurateurs, brewers, chefs, and retail owners need to demand excellence from each other to sustain the scene. Creating products and concepts that aren't just locally born, but of high quality, is key. "Local is good, but local doesn't equal good," says Brandon, who with co-founder Jeff Hancock delivered DC's first brewery since the '50s in 2009.
Landlords, for their part, are maturing, says Cushman & Wakefield's David Dochter. Many, even on the institutional side, are beginning to appreciate locally grown retailers and restaurateurs, since bringing them in can help create an identity for assets and the neighborhood. Owners who simply go for the most well-known tenant who can afford to pay the highest rent may lose out on special opportunities. Dave also says he's eagerly watching the Union Market/Florida Ave NE submarket as a future retail hotspot.
Miller Walker Retail Real Estate's Bill Miller is watching H Street NE, with retail rents approaching 14th Street Corridor-type levels—as much as $100 per SF. But Bill figures that high might not be sustainable, since the corridor isn't yet as fully developed as 14th Street. And if neighboring landlords get wind of big rent numbers achieved by spots next door, it may stunt the market, so signing smart, sustainable deals will benefit everyone, he adds.
Big thanks to the folks from The Hamilton Live for turning what's usually a hoppin' concert venue into an equally as hoppin' Bisnow venue. After the panels, guests were treated to an array of sliders and sushi as well as beer from DC Brau, great wines, and a bourbon-laced signature cocktail created specially for the event.
Taking a break from the schmoozin': Rappaport's Bill Dickinson and Jason Yanushonis with Thur & Associates' Shary Thur and Combined Properties' Susan Kirn. Stay tuned for more Summit coverage tomorrow.