Retail on Capitol Hill: Part I
by Larry Janezich
Posted April 20, 2026
“Why can’t we have something on Barracks Row besides bars and restaurants?”
–CHC reader comment
Small-scale retail – brick and mortar businesses* – are essential to the charm and desirability of the Capitol Hill community. Even locally owned bars and restaurants are important for the quality of the lifestyle of neighborhood.
Walking Capitol Hill’s commercial corridors one encounters numerous empty store fronts on Barracks Row, Pennsylvania Avenue, SE, and H Street, NE. New occupants tend to be restaurant chains. For many residents, retail on Capitol Hill is less vibrant and less interesting.
The DC Office of Planning has launched a new H Street Land Use and Market Study covering 3rd to 15th Streets NE. The goal of the study is to help shape what gets built, what kind of businesses residents support, how public spaces are designed, and how to strengthen H Street’s identity for the long term. For more on the study, go here: https://engage.dc.gov/w68032
So far, how to bring that help to Barracks Row and Pennsylvania Avenue, SE, has not been the coordinated focus of the city or its local institutions.
ANC6B has floated the idea of a roundtable to bring together commercial stakeholders to brainstorm ideas as to why a better retail mix seems unachievable on Barracks Row. This is not a new idea. In 2019, ANC6B formed a Working Group on Barracks Row to address challenges facing commercial/retail outlets on 8th Street, SE. After an initial burst of enthusiasm, the effort dwindled and then faded away without resolving anything. A proposed moratorium on bars and restaurants on Barracks Row in 2009-2010 likewise went nowhere.
CHC conducted several interviews to try to better understand the issues in play. Here are some of the most commonly cited factors that make it difficult for local retail business to survive on Capitol Hill.
Amazon
It’s easy – just click and buy something on Amazon.
High Rents
According to a former Capitol Hill business owner, “it is incredibly difficult for small retail to be successful – rent for retail space on Capitol Hill is astronomical.” A real estate broker told CHC rents can range from $30 to $80 per square foot, depending on the buildout.
Triple Net leases
According to a former small business owner, many commercial retail outlets on Capitol Hill have what is known as “triple net leases” – “so that’s really, really scary for a small business.”
Triple net means that a lessee not only pays base rent but also pays property taxes, insurance and upkeep for the building – property owners don’t pay anything. Potential tenants may know their base rent but have no idea what annual costs of maintenance or property taxes will be.
A small locally owned retail outlet like the former Radicci related their monthly payment was $17,000 a month (which appears to have included triple net). One locally owned bar on Barracks Row is reportedly paying $25,000 a month in rent and triple net.
Financing Issues
Many of residents pass by empty storefronts and wonder why the landlord does not respond to the market by lowering rent. A knowledgeable source says that part of the reason for high rents is financing. A commercial building’s value is directly tied to income from the lease. If a landlord signs a long-term lease at a lower rent, the property’s appraised value drops. Commercial loans generally come up for renewal every five or ten years so landlords are very reluctant to lower the rent because it’s going to affect the amount for which they can finance their properties. This could trigger a refinancing and result in out of pocket expenses for the landlord.
Preference for Restaurants
Landlords often let a building sit empty, waiting for a long lease from a national franchise fast food place – say a tenant like Taco Bell. Leasing to a local tenant at a lower rent precludes leasing to tenant with deeper pockets. The former Capitol Hill business owner says: “I definitely think that has been a problem on Capitol Hill…When I was looking for a place I had multiple landlords tell me that they wanted restaurants to go in which I think is hilarious because most of the restaurants need highly engineered spaces.”
City Obstacles
Many current, prospective, and former tenants agree that the city’s permitting process is too burdensome, especially when compared other jurisdictions. The former business owner says “it’s very difficult to find out what you need to do to open and every time you talk to somebody they will tell you something different.”
Michael Warner, co-owner of DCanter with his wife Michelle, who recently opened an outlet in Old Town Alexandria, says that “the regulations in Virginia and DC are not that different – what is different is the ease of complying with regulations in Virginia. Within one or two phone calls you are on the phone with the person who can help you walk through the X, Y and Z that needs to be accomplished to get that permit. In DC by comparison it tends to be a bit of a rabbit hole and you spend a lot of time and a lot of effort trying to get through to the right people.”
*Some current and former brick and mortar include apparel stores (the former Bitter Grace), gift shops (Groovy’s and the former Monkey’s Uncle), second-hand dealers (Clothes Encounters), book shops (Capitol Hill Books), artisanal goods (the former Fridge and the former Homebody), antique shops (the former Capitol Hill Antiques and the former Found on the Hill), and consignment boutiques (Clothes Encounters), specialty food shops (the former Souk and the former Mason & Greens ), barber shops (Ja-Jo’s), hair stylists (Blackbird), florists (the former Ophelia’s), hardware stores (the former 8th Street Hardware), leather goods, (the former Quavaro), and custom furniture (the former Septcarres).
Next: Retail on Capitol Hill Part II
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