Maybe the rent was too darn high.
The developers of a downtown hotel-turned-apartment building have lowered the rent on 27,000 square feet of first-floor retail and office space that has sat empty for about a year.
The Residences at the John Marshall is advertising a “major rent reduction” on its vacant 21,700 square feet of retail space and 5,000 square feet of office space, according to a flier being circulated by Commonwealth Commercial, the brokerage representing the property.
The newly advertised rent is $17.50 per square foot per year on the retail space and $15 on the five office suites. Brokers familiar with the space said the original asking price on the retail was in the $20 to $25 range when the building opened for business at Fifth and Franklin streets in late 2011.
“It’s a pretty reasonable rate, considering the market and the location,” said Jim McVey, one of the Commonwealth Commercial brokers representing the space.
According to a market report from Cushman & Wakefield | Thalhimer, the average rent for retail in downtown is about $13.50 per square foot per year.
Developer Dominion Realty Partners spent $70 million converting the historic hotel into 238 apartments. Calls to Michael Campbell, principal at Dominion Realty, were not returned by press time.
McVey said he was in serious discussions with three tenants for spaces at John Marshall – two retail users and one office – but that nothing was final.
As far as incentives go, Dominion Realty is willing to do the basic build-out and cut a break on the rent in the right circumstances, McVey said.
“We’ll deliver just the vanilla box,” McVey said. “And ‘free rent’ is negotiable.”
It isn’t easy to lease retail space in that neighborhood. Both the John Marshall and the nearby Miller & Rhoads projects have big blocks of space available for lease.
After three years on the market, Miller & Rhoads, which has 21,000 square feet of total retail space, leased its first 2,100-square-foot space in January to Liberty Mutual.
Some nearby projects have seen recent success in landing renting tenants, including the Berry Burk building and Shockoe Valley Heights.