Is DC Pricing Out Smaller Competitors?
We stopped by the Jimmy John's booth at ICSC last week to learn about its expansion plans for DC. Real Estate director Chris Newman tells us that they are working on eight deals in DC, mostly focused on the central office district area. But they've been facing difficulty locating viable sites because of skyrocketing rental rates here. This market is so hot right now that some businesses are willing to operate at a loss and/or knowingly overpay in order to secure prime locations--tough tactics for smaller players to contend with.
We also spoke with Streetsense's James McCandless to get the broker perspective on whether smaller and local players are getting priced out of DC. He tells us that local shops actually have an edge in the DC market, partly because their superior knowledge of local spaces gives them an advantage. Also, the transient nature of the DC population means customers are more willingto try unique local brands like Sweetgreen or Taylor than folks in other markets. And finally, James tells us that DC is fortunate to have sophisticated landlords that understand that a better mix of businesses is better for everyone, so they don't just go with national brands that sound familiar.
