Restaurant Development & Design

JAN-FEB 2018

restaurant development + design is a user-driven resource for restaurant professionals charged with building new locations and remodeling existing units.

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As Disruptors Disrupt, Strategies Shift Site Selection BY DANA TANYERI S ite selection is and always has been about two simple objectives: pick- ing darlings and avoiding dogs. But that's where simplicity ends. Finding right-size sites that offer affordability, visibility and accessibility in areas with ideal customers, complementary competitors, and the magic mix of retail, business and residential is increasingly challenging. Demand for traditional A+ endcap locations in premium develop- ments far exceeds supply. The availability of attractive second-generation sites has tapered off significantly from high levels seen after 2008 when brands with access to financing went into real-estate vulture mode. Rents and construction costs continue to rise, and with the lines between some industry segments blurring, the field of competitors vying for sites with similar attributes has mushroomed. Add to that laundry list the fact that seismic shifts in consumer usage patterns are rapidly changing both the restaurant and retail landscapes — and, in some cases, what darlings and dogs now look like — and the challenges become even more complex. So what's an operator to do? Real estate pros at growth-oriented companies say they're sharpening their site-selection strategies with bigger data, stronger relationships, more flexible formats, and a proactive approach to mining new and emerging opportunities. "The restaurant space is challenged and has been for the past 12 to 18 months. There's a lot of discussion in the industry that there are too many units, es- pecially fast casuals, and issues like minimum

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