Restaurant Real Estate: Key Trends to Consider

Author Casaldra Andreassen Read bio
Tags: restaurant real estate
Date: May 1, 2023

Buying property for a restaurant can be an intimidating endeavor.

Understanding what to look for and the latest trends in the industry is essential for making the right purchase decisions. Knowing which risk factors to consider when selecting a piece of commercial real estate is equally important.

In this blog post, we’ll cover restaurant industry real estate trends you should be aware of before investing in any potential locations. We’ll explain how choosing the right location can also guide your strategies and investments as well as breaking down key considerations that will help ensure long-term success.

Current Trends in Restaurant Real Estate

The restaurant industry has always been one that constantly evolves and adapts to changing consumer preferences, and this year has been no different.

One trend that has emerged in the wake of the COVID-19 pandemic is the surge in demand for outdoor dining spaces. With more people opting to dine in open-air environments, restaurants had to re-evaluate their real estate needs to accommodate this shift.

Another trend is the focus on delivery and takeout options, as more consumers prioritize convenience over dining in. To meet this demand, many restaurants are opting for smaller footprints and flexible lease terms, allowing them to pivot quickly in response to changing market conditions.

Finally, the growth of ghost kitchens and virtual restaurants is becoming increasingly popular, allowing chefs and entrepreneurs to operate delivery-only concepts with lower overhead and greater efficiency. 

It’s exciting to see these changes taking place and how they will shape the future of the restaurant industry.

Location Considerations

One of the most important decisions you will make is choosing the location for your establishment.

One key consideration is whether to set up shop in an urban or suburban area

Urban locations may offer higher foot traffic and greater visibility, but also come with greater competition and parking challenges.

Suburban environments may provide more space for parking and a larger target demographic, but you’ll need to carefully assess the proximity of competitors and accessibility issues. It’s also essential to evaluate accessibility, parking, and foot traffic no matter where you choose to set up shop.

Ensuring that potential customers can easily get to your restaurant is a crucial factor in your success. By keeping these location considerations in mind, you’ll have a better chance of picking the spot that’s just right for your restaurant.

Fine dining restaurant

Financial Factors

It’s crucial to consider the financial factors before making any moves. Here are some key points to keep in mind:

  • Lease agreements should be analyzed thoroughly, and terms should be negotiated to ensure profitability.
  • Operating costs and profit margins must be fully understood to avoid any potential pitfalls.
  • Calculating ROI and long-term investment potential is crucial for making wise decisions.

With careful attention to these key financial factors, investing in restaurant real estate can be a smart move that yields significant returns.

Regulatory and Zoning Considerations

Securing the perfect real estate location for your eatery is crucial for your success.

However, navigating through local regulatory and zoning requirements can be a complex process. Before signing any lease agreement, it’s important to familiarize yourself with the permits and licenses required by your local government.

Ensuring your establishment is up to code and complies with health and safety regulations is vital to protect both your customers and employees. Finally, zoning restrictions and limitations can affect the size, layout, and accessibility of your restaurant. 

By understanding these considerations and working closely with city officials, you can open your doors confidently and successfully.

San Francisco Start-up Scene and Restaurant Real Estate

San Francisco’s start-up ecosystem has flourished over the years, drawing in entrepreneurs seeking to innovate and disrupt various industries.

As a result, the city’s restaurant real estate trends have adapted to the changing demands of a young workforce working long hours. Many start-ups require collaborative spaces, and with the rise of co-working spaces, restaurant owners have seen a surge in business as these spaces often offer added amenities like coffee, food, and a welcoming atmosphere for brainstorming sessions.

However, competition in the city’s real estate market is fierce, and restaurant owners must navigate unique challenges to secure prime locations.

Despite the tight market, the opportunity for success in San Francisco’s restaurant industry is significant. With the city’s top-tier talent, dense population, and boisterous energy, local restaurants have the potential to make a significant impact on the start-up scene as well as the city’s overall culture.

Let us help you navigate the complexities of restaurant real estate. Contact us for a consultation with one of our experienced professionals.