Westwood community leaders, developers comment on property stagnation

Jerry’s Famous Deli, a black building with a wide awning, has stood empty on Weyburn Avenue since 2013.

When its original owner died, a Japanese management company bought the building and tried to renovate it, but abandoned the project halfway, said Steve Sann, chair of the Westwood Community Council. Then, another landlord leased the building and it has stood vacant since then.

Jerry’s is one of many properties in Westwood Village that has remained empty for years. If landowners do not aggressively advertise their properties or fund renovations, it can be difficult to attract tenants, Sann said.

Some Village property owners hire brokers to lease their properties, while others lack the ability or willingness to pay a brokerage fee, Sann said. He added he thinks brokers allow property owners to lease to tenants more quickly.

Sann said many Village landlords only put a sign or a flyer on their building to advertise their property, which he thinks does not do enough to attract tenants.

Jim Brooks, president of Topa Management Company, said his company markets its properties through brokers and tries to lease to tenants who share a customer base, or have co-tenancy. Urban Outfitters, which was Topa’s first major property, brought a following of tenants, he added. Topa now owns more property in Westwood than any other landowner.

John Heidt, a landlord who partially owns the LaMonica’s NY Pizza building on Gayley Avenue, said many properties remain vacant because landowners charge rent higher than the market rate to cover their losses from overpaying for the property.

Landlords often charge rent higher than the market rate because they bought the property above the asking price. Landlords overpay for properties to avoid capital gains tax, which they must pay after making a large profit from selling a property. They can evade the tax if they reinvest their profits in 45 to 120 days.

“One would expect the landowners to accept any rent after the building has been available for years on end, but that rarely happens,” Heidt said. “Usually, the landowners wait for a tenant who will meet their rent demanded or try to sell the property for a profit.”

Sann said some landlords do not help tenants pay for building renovations with a tenant improvement allowance. This may discourage tenants from leasing the property because they must take on the full financial risk of renovations.

Brooks said he thinks landowners should also divide or expand their properties as per the requirements of the tenants. For example, Topa is dividing and drastically renovating Chili’s’ former space on Westwood Boulevard near Kinross Avenue to attract tenants, he added.

“To the general population it may seem like a lot of spaces are available, but in reality a lot of activity is going on,” Brooks said. “Over time, a number of new tenants who haven’t been announced will appear in Westwood.”