Commercial’s Latest Success Story: Restaurants

DAILY REAL ESTATE NEWS | TUESDAY, JULY 26, 2016

Restaurant sales are booming. In fact, restaurant sales for the first time in nearly two decades surpassed supermarket sales last year. Landlords are using that to reinvent the “now-suffering” retail mall. As e-commerce drives some consumers away from shopping centers, food is bringing them back in, CNBC reports.

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"With restaurants that are coming in with strong, high growth, they're sort of the saving grace for landlords of these retail spaces to come in and drive traffic and sales," Melina Cordero, CBRE's head of retail research in the Americas, told CNBC.

CBRE reports four areas of growth: Food trucks, “grocerants,” food halls, and celebrity chef restaurants.

Some landlords are even approaching food start-ups and offering up seed money to them to locate in the landlord’s shopping center. Smaller restaurants are becoming part of new food halls or located within grocery stores in eating areas inside or by offering diverse prepared food options (known as “grocerants”). The celebrity chef restaurant –such as Wolfgang Puck in Las Vegas or Bryan Voltaggio in Washington, D.C. -- is also becoming the new department store as a retail anchor. And mobile food trucks have bloomed into a $2.7 billion business. Landlords are courting them for food courts at shopping malls.

"Food trucks are basically the pop-ups of the restaurant business,” Cordero says. “They come in, they can set up, low cost, and they're constantly changing," which meets consumers’ demand for diverse food options.

Source: “Food Is Ruling Retail Real Estate, and Food Trucks Are Moving In,” CNBC (July 22, 2016)