In a recent California appellate case, DNI Food Service, Inc. dba Zaya’s Bistro v. Kim, the owner of a multi-tenant retail building in Los Angeles County was notified that two parcels of its land would be affected by a freeway expansion project. The building wasn’t located on either of the parcels, and there were five tenant vacancies.
Caltrans planned to take some land located between the street and building and create an easement over the sidewalk. Real estate agents working for the builder were communicating with Caltrans. At about the same time, these real estate agents advertised tenant space in the building, marketing the property on the basis of its location and its reduced rents. A food services company and its owner saw the ad and contacted the agents. They were hoping for a two-year lease but signed a five-year lease with a personal guarantee. The food services company spent money and time and opened a restaurant in the spot that they rented.