As first reported by the Georgetowner, Zara, the discount fashion store located at Prospect and Wisconsin, closed on Good Friday. Assuming no new tenant will quickly move in, this will add a significant amount of vacant retail space to a market that already faced a glut.
Just the Zara building alone is quite massive. (Technically it looks like historically these were separate buildings, but they were combined at some point) Combine the space left behind by Zara to the long vacant space next door, which previously housed Max Studio and that block alone has quite a bit of empty space.
Wisconsin Ave. is pockmarked with vacancies up and down the street. And M St. has some pockets of vacancies (mostly, it seems, are owned by EastBanc, who, to their credit, has sought to use the space for long term “pop-ups”).
On top of these many small empty spaces, the market is going to soon see another large infusion of empty space. The Latham Hotel redevelopment project will make another 25,000 square feet of retail space available. No tenant has been announced.
And don’t forget the long delayed project to construct a new retail building on Prospect St. where the parking lot across from Cafe Milano now stands. That would add 40,000 square feet of retail. GM has heard through the grapevine that while some possible tenants have explored the project, citing worries that it was too far from Wisconsin (plus the asking price) not enough have signed up to start the construction.
Is this just a reflection of the much discussed “retail apocalypse”? Maybe. Time will tell. The more immediate question is if this glut of vacancy will force landlords to lower the rent? It’s awfully galling when you see buildings like the former Appalachian Spring sit empty long after the tenant left, refusing to agree to the hiked up rent.
Another query: Wouldn’t the Zara building be just as suitable for the lame forthcoming Capital One Cafe? Wouldn’t you imagine that Capital One could have obtained the space for far, far less than the insane $50 million they paid for the former Nathans building? And that’s the rub. As long as big, irrational fish like Capital One lurk beneath the waters, landlords will keep tossing away perfectly fine tenants in the hopes to land the Big One.