Do some leases come with a curse clause?

You know where they are. You’ve probably even predicted that the next tenant will not last more than eight months. A year, max.

But like clockwork, every year or so, or maybe even every few months, a new business is moving in. You hope they can break the spell. Maybe they have a special touch.

But deep down you know they can’t. Because despite the entrepreneur’s bravery, he has leased a Cursed Location.

Richmond has its fair share of such spaces. Either there is constant tenant turnover, or the building is perpetually empty.

Commercial real estate pros are split. Some say the label is nothing but a bunch of voodoo. Others think there may indeed be a hex on some spots.

Brian Glass, a broker for Grubb & Ellis | Harrison & Bates, said there is no such thing as a cursed location, just bad operators and bad timing.

“There can be poor management, a shift in demographics or market conditions, such as new competition, that changes the dynamics of a center, and that happens all the time,” said Glass.

Glass said he is having conversations with one shopping center owner that is considering changing the use of his property because the market has passed it by, but not because it is cursed.

Commercial land broker Read Goode of S.L. Nusbaum said that curses exist but that they can be broken.

“Regardless of a location and its amenities, once three of four businesses have gone out of it, it just becomes cursed,” said Goode. “To kill the curse, a new user normally has to totally redo a site so that it looks different to breathe new life into it.”

In the case of an existing restaurant that is equipped and furnished, it is cheap for undercapitalized owners take it over.

“The revolving door just keeps revolving,” Goode said.

Jim Ashby, a broker for Thalhimer, said some locations seem cursed but that there is a scientific reason, something about the placement or design that just doesn’t work well.

“Locations that fail oftentimes are off the beaten path, where someone who is putting up a retail use should be putting up an office or medical use,” Ashby said.

Traffic patterns, accessibility, competition and parking could all contribute to a certain property’s misfortunes, he said.

“The issue may also be the rental rates,” said Ashby. “A landlord or owner may not be quoting in terms of what is a realistic rental income on the property.”

Ashby said the recession has caused many landlords to consider alternative uses for their property.

In some cases it’s a new buyer that plans to change the use of a property, such as the case of 9498 West Broad St. The restaurant property, located near Lowe’s and next to Pizza Hut, has been called Ham’s, Hops and, most recently, That’s B.S. Burgers and Sports. (You can read about it here).

In March, the Virginia Credit Union bought the property with the intention of converting it into a branch.

Ashby said he had looked at the property for a restaurant client but it just didn’t work.

“The client felt it was a little bit back off of Broad and really didn’t stick out where people would notice his restaurant,” Ashby said. “I think a bank is definitely a good alternative.”

The location was one of several “cursed locations” identified by BizSense readers.

Whether or not these locations are actually cursed, unlucky or just in need of the right tenant is a matter of debate. Some have operating business in them, in which case any curses might be broken.

And everyone knows that curses exist to be broken.

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Jim Tucker
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“Cursed” is an unfortunate choice of words. Clearly the availability of low cost capital in recent years has encouraged some poorly-conceived development of sites that might have been otherwise used. Today’s challenge for these properties is generally described best as “creative reuse” and for some sites presents a very tall challenge that only occasionally include the bulldozer. “Economically feasible” is what every enterprise seeks to achieve and an appropriate choice of venue is a large part of reaching that goal. Locations that have been developed to address only a narrow slice of uses will typically seem cursed as they wait… Read more »

Southside
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Southside

The old A&P location in Meadowbrook Plaza in Chesterfield has been empty for decades and the plaza itself has had its up’s and down’s. Recently though it looks like the owners have been investing some money for visual improvements. I wish them luck.

Mariane
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Mariane

Sometimes it’s the side of the road. If you specialize in breakfast food, your drive-thru is going to go bust if it’s on the side of the road where people are going home, not to work. When commuters are in a hurry, they’re not going to cross lanes to get someplace and then cross lanes again to get back on the road to home or work.

How about the grocery store building next to the Glenside Park n’ Ride? I have never seen a tenant there.

Tim
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Tim

I think you meant “shuttered” when referring to the old Steak and Ale at Glenside & Broad…then again, “shuddered” might be appropos considering the Tudor architecture and lousy location.