Local Businesses Boxed Out Of Prime Real Estate

It isn't always easy for local businesses to lease retail space in the District, and some developers argue national chains have an advantage when trying to secure good locations.

Joel Finkelstein owns Qualia Coffee shop on Georgia Ave., a few blocks from the Petworth Metro station. Appearing Monday on the Kojo Nnamdi Show, he said he's been looking for a second location in the coveted downtown area for more than a year now, but he hasn't had much luck.

"Some of the rents I've been quoted are four times what I am paying in my current location, and they want us to show that we can pay the rent on the second location based on our revenue from the first location," said Finkelstein.

That makes it virtually impossible for not just Finkelstein, but a lot of business owners who are looking to expand, but don't have a lot of revenue.

Jim Abdo is President of Abdo Development. He said landlords in popular locations usually prefer to rent to what are known as credit tenants, large businesses — typically national chains — that have deep financial resources to sign long-term leases.

"It's very very challenging... you have got investors, whether it's pension funds or bank lenders who are looking for certainty... certainty with the retail tenant," said Abdo.

As for Finkelstein, he's planning to start a food truck; if you can't rent a hot spot, at least you can park there.