A key retail slot in Detroit’s Eastern Market food district has finally hit the market for lease.
It’s been more than a year and a half since a very public falling out between landlord Sanford Nelson and his Firm Real Estate LLC company and Russell Street Deli owner Ben Hall prompted the restaurant to abandon its longtime home and shutter at the end of August 2019.
Detroit-based brokerage firm Uncommon Space has the listing for the nearly 1,700-square-foot space and the roughly 1,500-square-foot basement at 2465 Russell St.
Now, the space has hit the market at $30 per square foot per year, not including the cost of utilities.
That’s well north of the $1,700 per month Russell Street Deli was paying. At the new rate, rent would be approximately $4,250 per month, not including utilities. Obviously, the $30 a square foot is subject to lease negotiations and could end up being lower.
I reached out to Nelson’s spokesperson and received the following comment: “2465 Russell Street’s rate is consistent with current 2021 market rates.”
Nelson told Crain’s in April 2019 that he negotiated a new market-rate lease extension for five years with Supino Pizzeria, the former deli’s neighbor to the south, in September 2018. He didn’t disclose the rate, but previously said the market rate was around $25 per square foot. So there is some precedent to the rate bump.
The spokesperson said Russell Street Deli ownership informed Firm Real Estate on Dec. 31 that they would be moving from the property and vacated the space Jan. 4. It had been used for storage.
“It’s an awesome location and will be great to get it activated again soon,” said Kyle Erin Darcy, broker and founder of Uncommon Space, in an email.
Darcy said Russell Street Deli was paying “way below market rate” and “the new asking rent is consistent with other leases we’ve done in the neighborhood over the last two years.”
“If I’m not mistaken, their rent dates back close to 15 years when they signed their lease,” she said.
There have been concerns the last several years about the new corps of Eastern Market landlords jacking up rents in the historically cheap food district.
Nelson has entered the fray the last couple of years, as have other Detroit developers and economic development professionals who are also looking to invest in the neighborhood just northeast of the downtown core.
Others include Roger Basmajian and George Jackson and New York City-based developer ASH NYC, replacing the street-level business operators in Eastern Market that traditionally owned their own properties (and sometimes others).
The millions planned in investment and renovations have rustled up fears about rent increases, identity changes in the historic district and inclusivity in development.