Raku - Bethesda Row

Raku, the asian fusion restaurant located in Betehsda is generating an eye popping $4 million in annual sales. Raku is the highest per square foot restauarnt tenant for Federal Realty www.federalrealty.com in the Washington DC area exceeding $2,400 per square foot.

Subway (www.subway.com) has locations within Dulles Airport (http://www.metwashairports.com/_/File/_/shopdulles.pdf) between gates D and Z.

Gross sales for the two sites combined exceed $3 million per year, and the base rent for each retail space is $40,000 annually. In addition, Subway must pay 15% of every dollar earned above $50,000 in monthly revenues.

DC neighborhood retail rents have softened due to the slower economy. Z burger http://www.myspace.com/zburgerdc is taking advantage of reasonable retail rents in Glover Park http://en.wikipedia.org/wiki/Glover_Park. Next week, Z burger is opening a 2nd location at 2414 Wisconsin Avenue formerly an 800 square foot laundromat. The Z burger owners are paying $3,000 per month with no tenant allowance. At their own cost, Z burger did a complete rehab to the small 1 story building and added another 600 square feet effectivly reducing the per square foot rent from $45 to $26. 

The current lease ends in October for the 1,652 square foot Fedex Kinkos (www.fedex.com) location at 419 11th Street NW aka 1001 Pennsylvania Avenue. Capital Retail Group(www.capitalretailgroup.com) estimates the company will renew with their Landlord Hines (www.hines.com) at $47-$53 NNN or 35% above their current rate of $36 NNN.

In 2006, Lee Jensen’s family sold the building formerly occupying Lee Jensen auto repair located at 1333 14th Street N.W. to Fathom Creative(www.fathomcreative.com) for $2.65 million. The 3 story 6,250 square foot building is currently in shell condition but will be totally transformed after a $1.5 million dollar renovation. Fathom Creative will move from 1606 20th Street N.W. and will occupy the entire building sometime in the 3rd quarter of 2008. The building originally built in 1885 is expected to appraise at $4.25 million.

The value of a 3,433 square foot single story building located at 4826 Annapolis Road in Hyattsville, Md is $1.2 million assuming a 7.5 CAP rate using the income method of valuation. The landlord receives $20,000 per year in parking revenues from nearby retailers and $70,800 from the two tenants. The El Paso market pays $19.30 for 1,491 square feet. Angelica, a combined clothing store and CD shop, occupies 1,952 square feet at $21.50. Both tenants are on a triple net lease and share the yearly taxes of approximately $4,900. A newly approved town center sector plan for downtown Hyattsville will help spur retail development. Go to http://www.mncppc.org/cpd/bladensburg.htm for more information.

Pound Coffee will be the first new retail tenant in the area known as NoMa opening in January, 2008. Khalil Ghannam, the owner of Pound Coffee, signed a lease in November, 2007 to occupy approximately 820 square feet of retail space at the all new $220 million dollar Alcohol Tobacco Firearms(ATF) building located at Florida Avenue and 2nd Street N.E. You can visit http://www.poundcoffee.com to learn more about the coffee house.

Less than fourteen months after opening, Shimba Hills closed in early August at the Verizon center due to poor sales in relation to economics. The approximately 1,050 square foot store located in the 600 block of 7th Street near the metro elevators commands an asking price of $75.00 per square foot plus a required $75,000 annual marketing development fund contribution. The owners invested over $300,000 in initial capital to fund the store but could not drive enough traffic forcing the recent closure. To be successful, the next tenant will need lower rent and better signage for more visibility. 

 Five Guys signed a lease in Dupont Circle at 80.00 NNN for a 2,040 square foot retail space at 1645 Connecticut Avenue NW just north of Dupont Circle next to Cosi cafe. The monthly rent including all passthroughs is over $15,000 per month. The landlord contributed $40,000 toward a buildout estimated to be over $200,000. Retail rents will go only higher in premium micro markets such as Dupont. Retailers continue to compete for premium space driving up rents in a limited supply area. How can a good burger joint survive?

PNC bank is paying $60.00 per square foot for the new branch located on the first level of the Cooper Lewis condos located at the N.W. corner of P Street and 14th Street N.W. PNC will be open in March of 2007.