Kaffismiðja Íslands and the corner shop Drekinn and where the music and instruments store Rín* lived for forty years before moving to Brautarholt in 2004, has become a canvas for street artists while its future is being decided. You can play around with this interactive map of Reykjavik to find the streets mentioned in this post...
I found some interesting info on this location: the property just below it takes an L-shaped turn up to Njálsgata, and is where the Ölgerðin Egill Skallagrímson brewery used to be. I remember very well being able to smell the almost too-rich aroma of a new batch of Malt Extrakt being brewed there before they moved out to Grjótháls. In the corner crook created by the fairly new apartment complex built on the site of the old brewery (btw, the 1100 square meter site was bought by the City for a sweet 37 million krónur back in 2000...good god how times have changed! That amount might buy you an average three bedroom apartment a tenth that size today) sits the Drekinn house built in 1905, a blue cement building from 1943, and this now-rundown structure. It seems its owners have requested permission to tear down at least six times since 2006, though it looks like the local building preservation society has had a hand in making sure that didn't happen, and there seems to have been a co-owner of the lot that also refused to agree on demolition. Ultimately, I'm sure it was the bank crash that set any grand real estate intentions on ear, seeing as the last specific mention I could find was an August 2008 photo report of abandoned houses in the midtown area by the Prevention Department of the Capital District Fire and Rescue Service, when there was still enough money floating around to bitch and squabble over who would get what share of the prosperity pie. Sigh.
The picture below is one I took last fall of some nice visitors who stopped to snap a classic shot of the Drekinn shop.
*Some of the links in this post are in Icelandic...sorry I wasn't able to find anything in English with the same info, but now you've got more material to practice your language learning with!