Is there a term for this real estate strategy?

November 17, 2009 7:19 AM

Is there a word for the strategy of real estate companies who buy up properties in one area and keep the buildings empty in order to force out local businesses?

Not far from where I live, a real estate project management company was given the task of improving a commercial area. They did this by buying out many commercial spaces in the area and keeping them empty, forcing out other "undesirable" small businesses as the area became abandoned by customers. They then bought up all the commercial spaces and rented them out to "classier" businesses.

Is there a term that people working in real estate would use for this tactic?

posted by creeky to society & culture (4 answers total)

It sounds like a modern, non-racial version of block busting. More generally, what you describe is part of both "speculating" and "gentrifying" -- both of which can be either neutral terms describing a normal set of of changes in a neighborhood, or connotating immoral if not downright illegal behavior by the buyers, depending on the context.
posted by Forktine at 7:33 AM on November 17, 2009

I would use "urban desertification."

Real estate agents would use "urban regeneration."

I guess it depends on your political view and what point in the cycle you catch the process.
posted by MuffinMan at 7:33 AM on November 17, 2009

I've been following a process like the one you describe going on in St. Louis for a few years now. It's not just small businesses, it's everything---houses, lots, and so on. The folks who blog about it don't have a specific term for it, I don't think---but they do have several choice adjectives...
posted by tss at 7:45 AM on November 17, 2009

When this is done to apartments, it's called 'warehousing.' This term dates at least from the New York City residential real estate market of the 80s. It's part of the name of an advocacy group (Housing Not Warehousing) and shows up in this New York Times article from 1985, among others. Real estate people would probably understand what you mean if you apply the word to those commercial property shenanigans. There may be a more current industry term, though.
posted by expialidocious at 2:16 PM on November 17, 2009