The old Namu space
This is more of a real estate question, but what causes old restaurant locations like these to stay vacant for so long? That space has been vacant for over a year now. I'm not a property owner or anything, but it seems to me that it is best for the owner to rent out to the best available suitor, and that being vacant for a year is actually undesirable. No? Isn't lower rent better than zero rent?
What are the possible reasons for this space being vacant for so long?
There is no one cause, but you're approaching this question from the mindset that property owners control the market, and have unrealistic expectations, so therefor are at fault. That's rarely the case.
Below market rent does not magically create a qualified restaurant. Low rent just creates distrust, or brings a lot of amateurs to the table, drawn to a bargain. Sometimes that works, more often than not, it creates a fly by night restaurant and people try to point blame, starting with faulting the location. Now the landlord is stuck with a tougher vacancy to fill.
Then you have eccentric choices, like State Bird Provisions opening in a tiny space, on a block that was and may still be, heavily subsidized by the city, for entertainment venues. The Chefs spent at least 4 years shopping around before opening there. Should we fault the working Chefs for taking that long in a city full of empty spaces? I would take a wild guess that they are paying the same rent, or even more, than they would have at other spaces they turned down, and more power to them. Daniel Patterson is opening up his next place in what housed a dumpy greasy spoon, without any neighbors. Unless Namu catches someone like that, it's essentially a neighborhood location, off the beaten track. You consider it prime, because it recently housed a family owned business with national recognition, but for the insecure restaurant types with 5 mediocre locations out of the city, they just see it as the space Namu left behind to go to a trendier market.
At the moment there are more locations available than there are good restaurant management teams with the startup funds to open. A lot of recent openings are actually sales of businesses, assuming already existing leases. It's a waste of money, but makes the process easier.
This is more of an economics answer than a business answer, but if you think prices are going up, you should wait for a better offer. Similar to the problems in an economy called "liquidity trap", where consumers refuse to spend - even on reasonable and valid investments - due to expectations about the future.
The longest open space I know of is Food Street on Castro St. in Mountain View. I used to go to Food Street in the early 90's (94 - 95) when I worked at a particular company, and we always got big plates of their szechuan noodles. I think they boarded up in about 97 --- a 15 year empty space means something non-rational is going on.
Another empty space around there is the larger chinese place near california - I forget its previous name, China something - it's been empty for quite a long time, but I think prices are going up - the owner will likely be very happy by holding out.
Also, I noticed that the asian market on Castro turned into Ava's, which is now more upscale with less asian influences - more like a Whole Foods you can walk to. I hope they survive, unlike Niki's.
In other castro st news, Temptations shut down for a remodel. I suspect they'll be back up and running quick --- likely with a new concept, I suspect it'll be japanese but we'll see.
How long is the average restaurant's lease? You'd think that in this day and age a food-trucky or pop-up type business might be interested in at least a short-term lease of an open storefront, with fewer of the guarantees of locked-in rent that more traditional restaurants have. Is there something that prevents property owners from doing this to get immediate cash while they continue to shop around for longer-term, higher-paying tenants?
Logistically, it's just a nightmare. Pop-ups aren't looking for a lease of any type, or the commitments associated with it, even short term. It's more work, and more liability but the problem there is typically from the expectations of the Pop Up itself, and what their needs. Few places are set up in move in condition like Bruno's, or a proper party rental, and a lot of these pop-ups avoid that level of structure because they obviously aren't budgeted to do that. If it's an on-going pop up, then giving the commercial broker full access to continue shopping it around can create issues that aren't worth it.
There's a reason why pop ups often end up in the same locations. How does a property owner find a pop up if they even want one anyway?
I think it's fairly common for restaurant spaces to be vacant for quite some time. I can see a number of possible reasons, including:
1. The owner may have unrealistic expectations about how much rent can be squeezed out of a particular location. That may have been a factor in why Namu is no longer there.
2. Restaurant leases are usually long-term contracts that neither party would enter willy-nilly. It may make sense for the owner to hold out for a while.
3. The fact that the previous tenant is no longer there may give prospective tenants second thoughts about the location. You don't want to open a restaurant in a space that is "cursed." Speaking of which, here is a thread: