About a mile from my house there is a large “town center” project under construction. A grocery store, movie theater, plaza with ground-level retail, surrounded by a few hundred condos. The hoarding around the site is covered with huge, beautiful renderings of what the project will look like when its finished. These drawings show the stores occupied, and with the names and typical signage of existing businesses on them. I am fairly sure, however, that none of these stores have actually leased space in this development. First, if they had I am sure I would have heard about it; I’ve been following news reports and press releases from the property owners, leasing agents and the contractor, and they have not mentioned any of the names shown in the pictures. Secondly, they just seem a bit TOO upscale for the area. Nice though this place may be, I just can’t see Aveda coming to Hyattsville quite yet. Other Dopers in the Price George’s Country area can confirm or deny this.
So whats the deal? is this a common tactic to help sell real estate? Is it legal and/or ethical?
Sure they can. If they have done these types of developments before, then they have a good idea of what kind of tenant to expect. No guarantees so buyer beware. Although there may be some assurances that the developer can’t lease to the local welfare office or something like that.
How do you know that none of the space has been pre-leased? New leases are sometimes in press releases and sometimes not. They may still be negotiating terms with the retailer.
As far as your comment on the neighborhood, stores like this won’t be geared towards the locals, if indeed they are not affluent. They are geared towards the yuppies living in the condos and working in the offices. Housing prices in some areas have foreced people to look at areas they wouldn’t have a few years ago. So in a place like Hyattsville, you have young professionals and empty nesters with money moving in because they don’t quite have enough to live in a place in Montgomery County.
I have no idea of the condominium sales laws in your jurisdiction, and I am not your lawyer, etc.
In New York, the offering of conondominiums and other real estate syndications is only made by an “offering plan”, which legally is a prospectus under the New York state securities law. Were this in New York, it is likely that the offering plan would have a description of the anticipated retail component, and more important, a disclaimer regarding the actual tenants. The advertising for the development would all have a statement that the advertising was not an offer, which must only be made by prospectus/offering plan. If you bought, it is likely that the disclaimers in the prospectus/offering plan would preclude any fraud suit over the possible deception.
That being said, I would be very surprised if the developer used actual company names without at least getting permission from the companies. If the space isn’t leased to those companies, perhaps the developer has those tenants in similar developments elsewhere and therefore has some legitimacy in using them as an example here. On the other hand, new, upscale developments often have higher-end retail than that of the surrounding area, so it might be that these stores are leased to the companies they have listed.
Well, one of the logos they show is an AT&T Wireless store, so I’m guessing that one isn’t for real. The other thing I note is that there are some, well, oddities. For example, there is a USTIN GRILL, rather than AUSTIN GRILL, although it uses their font. Some of the other logos are low-res enough that I can’t tell if they are simply trying really hard to suggest the names without actually saying it.