What’s in Store: Rise of the restaurant
Guest: Karly Iacono
Topics: Restaurants, restaurant leases, QSR, grocery costs, franchising, new concepts
What’s in store this month? A better question might be what’s on the menu? Chris Ressa and CBRE’s Karly Iacono are back and this s episode is all about the restaurant industry.
What You’ll Learn:
- What are projected total sales for the restaurant industry in 2024?
- How much have restaurant leases increased year over year?
- What percentage of retail leases are restaurants?
- How have grocery costs moved relative to restaurant eating out costs?
- How have restaurant operators evolved to a changing market?
About Retail Retold:
The Retail Retold Podcast highlights community retailer stories from across the country and gives a behind-the-scenes perspective from business leaders in both retail and real estate industries. The show’s episodes contain valuable insights that help solve the needs of entrepreneurs and real estate pros. Join host Chris Ressa and new guests weekly for amazing insights and thought-provoking stories.
Transcript:
Karly Iacono 00:07
Welcome to What’s in store the show where we cover hot topics at the cross section of retail and real estate. I’m Carly Iacono. And I’m joined by my co host, Chris Ressa. Chris, welcome. How are you today?
Chris Ressa 00:18
I’m doing great. How are you?
Karly Iacono 00:19
Can’t complain. Life’s good. Not as good as you though. I just heard you were at a celebrity golf outing. Now I know we talk about golf a lot. But what I’m jealous,
Karly Iacono 00:31
I don’t know, sounds the same, but okay, go on. Go on.
Chris Ressa 00:31
So it’s not a celebrity golf outing. I was at a golf outing where there were celebrities. I think there’s a difference
Chris Ressa 00:39
So OJ Anderson, former New York Giants football player puts on a golf outing for one of his foundations. And, you know, he’s got a lot of friends that are former giants, former knicks, and knows other celebrities that are, you know, want to support him. And they were part of the golf outing. I was invited to go to the golf outing, I was in a foursome with a, you know, business colleagues. And so it was pretty cool.
Karly Iacono 01:08
Fancy, very fancy
Chris Ressa 01:10
Oh, I’m far from fancy. But it was pretty cool. Got a picture with Charles Oakley. I saw Ja Rule. Yeah,
Karly Iacono 01:20
Alright. I have nothing to compare to that. So I think we’ll just jump in today’s content.
Chris Ressa 01:24
Awesome.
Karly Iacono 01:25
We are talking today about why, maybe not why, we’re talking today about the fact that Americans just will not stop eating out. And what this means for retail real estate. It’s a fun topic. And something that we really haven’t covered from just a granular real estate, and restaurant perspective. So I’m excited.
Chris Ressa 01:49
Me too,
Karly Iacono 01:50
I want to lay the scene a little bit with some stats, you know I love my stats, just some numbers. So we kind of all frame what this really means, like how big the industry is, and what we’re talking about. So I’m gonna start with the top line, I think most shocking stat, which is that restaurants are projected to be at 1.1 trillion in sales by the end of 2024. This year, per the NRA, the National Restaurant Association. So that is a huge number and a big jump from last year. What do you think’s driving all this?
Chris Ressa 02:26
So I think, you know, the restaurant sector has really, you know, had a boon from coming out of COVID. We all thought like, every restaurant was gonna close, they all didn’t. And there was a lot of ideation that happened. A lot of innovation. People really love the experience of going out to eat. There’s so many new remodeled restaurants, there’s so many new concepts. There’s so many different food groups, so many different price points, that people are loving going out to eat
Karly Iacono 03:01
So much that we have this amazing sort of trajectory that has far surpassed grocery sales. It’s just a cultural phenomenon at this point.
Chris Ressa 03:12
Yeah. I think that is fascinating that we’re spending, we’re spending obviously, we had breached that number, like where restaurant sales were higher than grocery sales, some years back, and then with COVID, obviously, it tipped back and now it’s come back. And restauranteurs continue to want to grow. That’s what’s you know, which speaks to the demand out there, right? We did. As Americans, we did 10% more restaurant leases than we did, or 10% more restaurants opened in ’23, than they did in ’22. 19% of all retail leases were restaurants. So they still want to grow. Because there’s demand out there seeing the demand for people going out to eat, you throw in technology, and what technology does to the restaurant. And you know, it’s a really compelling story for restaurants.
Karly Iacono 04:07
So let’s go phase by phase here. I want to talk about the real estate perspective, I want to talk about some of the new concepts, and why we think this phenomenon is happening at the level it is. So let’s start with the real estate piece. You mentioned that there were 19% of the retail leases signed last year were to restaurants, some sort, right, that could be fast food, it could be fine dining, and everything in between.
Karly Iacono 04:30
We’re grouping them all together. So 19% of the availability eaten up by restaurants. First, do you think we have room to grow that number?
Chris Ressa 04:30
Everything in between.
Chris Ressa 04:40
So given how successful and and obviously there are restaurants that are challenged. There’s a ton of staffing issues. There’s a ton of issues going on. There’s no doubt and inflation is out there. Challenges, no doubt just like every industry. But the fact that their comp, the industry is comping up as a whole, you know, you can separate fine dining out from QSR, and fast casual and all these things, and say, pinpoint, some are doing better than others and all that, but just as a concept, people want to go out to eat. And so when I look at the amount of leases that were done, at 20%, in one category for restaurants might feel like a lot, but given the success, and given the fact that those are more sales than our grocery stores in America, I think there’s probably some juice left to squeeze out of spaces and out of shopping centers and freestanding buildings from some more restaurants, you need the right operators, you need the right concepts, right, there’s still a high failure rate of restaurants. But I do think there’s more room for restaurants in America, given how much we love to go out to eat.
Karly Iacono 06:05
So there were two other trends that I think are kind of driving this that you’ve touched on in previous months. One was the rise of franchising, right? So as more concepts are franchised, it becomes easier for people to start a restaurant business that maybe wouldn’t have gone at it on their own. And then you have the other side of that, which is the rise in entrepreneurship, people starting their own businesses, less demand for long term corporate America jobs, or people want more flexibility. So there’s this rise in the entrepreneurial kind of spirit in America too. So I could see both of those trends coming together for kind of explaining the new business openings, but to your point, there’s still a lot of failures. But if you have more people coming in and really pushing for that, then I think your net positive is obviously going to be there.
Chris Ressa 06:52
And, for sure, and maybe it should be like totally, that, you know, we’re really innovating in food, because by the way, grocery stores are doing well in America.
Karly Iacono 07:04
Right? Right. We’re not saying that grocery is dead
Chris Ressa 07:07
grocery stores are doing well. We love grocery stores, they’re like, you know, the grocery stores are the foundation of like, a lot of our properties. And we’re not saying that grocery stores are bad, or, you know, doing badly. They are doing well, I just think there’s, you know, going out to eat has become not only something to do, because it’s part of you know, your three meals and daily routine, but it has really become entertainment in the fabric of our society. And whereas maybe at one time, it was for a piece of the society, but now it’s you know, entertainment for a lot of society.
Karly Iacono 07:48
And i’ve been reading a lot about the the growth and different segments generationally, which I think is so interesting. So we’ve gotten really good, of course, at data interpretation and understanding the consumer with all the tools out there. So there are now targeted, limited time promotions, targeted concepts, specifically for certain generations, right? The younger generations are finding new things on Tik Tok. And that’s driving food trends, and what they want to try, and this fear of missing out, and wanting to go even if it’s just for a donut, or what is probably not a donut, because it’s much too basic, whatever the new, you know, crazy thing is, they want to go try it, they want to post about it, that’s part of their experience. And then you have the all the way up to you know, the older Boomer generations that want value. They want to go out, they want to be catered to, and have a different experience with a completely opposite type of promotion. So I think the data behind all of this, and the targeting has been incredibly successful. But it’s very different by the generation.
Chris Ressa 08:53
Yeah, I think. I think the other thing is, you know, we’ve talked about this QSR and I would say this, like, what’s the difference between fast casual QSR and fast food?
Karly Iacono 09:08
Well, I could give you a definition. But I feel like anytime you search that they’re different.
Chris Ressa 09:13
Yeah so, we look at the we define those in leases at times because there might be restrictions. But the point I’m making is generally speaking, quality and whatever your definition of quality is one of the things that’s helped, whether it’s taste, health, whatever your definition of quality is freshness, quality food at the ready is more available today than it’s ever been. And so people, part of that increase is people paying for time, right? And the grocery stores too, have you know, dove right into that. There’s a huge prepared food sections in many grocery stores, right. You know, we use those a lot where we’ll go and we’ll grab those grab n’ goes at the grocery store. And those will be a meal. Instead of cooking four days a week, we’ll cook three and use that one, you know, the other day of the week. But I think that when you, you talked about the generations, I think one of the things that’s helped the limited time offers and all this really interesting promotions is the fact that quality food, whatever your definition of quality is, is much more readily available than it ever was to the average American, maybe the franchising world, you know, was a catalyst for that to happen or whatever. But I think that is part of the reason, and people are paying for some of their time back. I would say, right, and I don’t know about your family. But we definitely have some takeout nights, we have some eating out. But our much of our majority still in my household. And you know, I would call it pretty traditional for family home, is for dinner at least and breakfast for dinner and breakfast is, things that we’re making at the house from the grocery store, typically.
Karly Iacono 11:08
I would agree with that. But then you have examples like you can buy peanut Pad Thai for $16 on takeout, or you can spend $48 to buy all the ingredients and make it yourself. So I have moments like that where I’m like, oh, I want to I want to make something different. I want to try something different. And then you go to the store and buy all these things that are not in your regular rotation. You’re like, Well, that was absurd, right?
Karly Iacono 11:29
It costs much more. So I think there’s, if you’re experiencing or you’re exploring a different cuisine or less traditional ingredients, it’s often more cost effective to order out or to eat out. But your basic staples, I think people will continue to eat at home, but to surprisingly, less and less numbers.
Chris Ressa 11:29
Yeah.
Chris Ressa 11:49
I think. Yeah, I mean, I don’t know, what does it cost for you and your daughters to go grab lunch?
Karly Iacono 11:59
They have very sophisticated palettes. They’re like, I’ll have the grilled salmon and the roasted vegetables or the side of like aioli you know?
Chris Ressa 12:07
Yeah.
Karly Iacono 12:08
So it’s it’s a lot.
Chris Ressa 12:09
75-100 bucks.
Karly Iacono 12:10
Easy.
Chris Ressa 12:11
Okay. 100 bucks. So, but at the grocery store with a really healthy meal, for $100. For lunch, we can feed our family at a minimum for the week. Right.
Chris Ressa 12:25
On lunches. Right. So you I’m getting seven for the price of one is my point. Right? And maybe my numbers are a little off.
Karly Iacono 12:25
on lunches?
Karly Iacono 12:32
Its not always that ratio but yeah,
Chris Ressa 12:34
Right.
Karly Iacono 12:34
I guess. If there’s no specialty items yeah.
Chris Ressa 12:37
So I think there’s, we definitely eat out. And, we probably eat out more today than pre-pandemic. Now that’s partially generational where we were at that point where our kids like, you never wanted to leave the house because it was a nightmare going out. But now they’re old enough where they can sit at the table and have a nice meal. So I think that you know, we pick and choose some spots like on a Saturday night we’ll go out or even if we’re not going out we’re ordering in. But we still are pretty traditionalist and have a lot of grocery. But what I what I guess the punchline is our restaurant spend has gone up, but I’m not sure our grocery spend has gone down.
Karly Iacono 13:20
Exactly. And I think another sort of element to this is we’ve created these other categories that we didn’t know we needed before, like the specialty beverages. You know, the things they’re all these new words like, what what is it swicy? It’s my new favorite word. Its swicy, sweet and spicy. Yeah, there’s a swicy beverage that, you know, everyone needs to try. So we have all these new needs that really weren’t there. Need is a broad term or generous term, let’s say. So I think we have eating, then we have experiences. And now we have all these other categories, which is part of the reason that we’re seeing so much demand in new space leasing from the dessert category, the beverage category, things that are sort of ancillary, and are just adding to the spend but not taking away from another category in the process.
Chris Ressa 14:11
Yeah I think, I don’t know what, maybe it’s other forms of entertainment. I don’t know what’s gone down, but we clearly have spent less on something else, you know, and it’s probably incremental a little I don’t see it because our grocery spend has gone up and our restaurants spend as well. So it’s interesting, and one of the things that’s for the grocery spend is, you know, we don’t go to just one spot, we go to so many different places to get everything right. So anyway,
Karly Iacono 14:43
Make it as complex as possible.
Karly Iacono 14:44
I think another thing that that’s interesting that we should talk about is the rise of all of the delivery apps, right, the the access to prepared food is continuing to increase and as the fees come down, the efficiency goes up. You have just endless options, right? And it may be that previously a family or an individual it doesn’t matter, didn’t want pizza or chinese. And that was it. Right? So if you didn’t want pizza or chinese, what were you getting for takeout? Back in the day. Now, of course,
Chris Ressa 14:44
There you go.
Chris Ressa 15:15
You can get everything
Karly Iacono 15:16
You can get everything, you know, efficiently.
Chris Ressa 15:19
So I would say if I was down on any part of the restaurant space, and I say down wrong word. If I was, you know, thought there was some softness to me. I would be, it’s in the delivery app/space, because when you know you mentioned the fees, it’s expensive to order in for a lot of those all those unique new things. It’s not the old pizza delivery that we had growing up, it’s much more expensive. And the less you get, like,
Karly Iacono 15:58
The more the fees are,
Chris Ressa 15:59
Right?
Karly Iacono 16:00
Of course
Chris Ressa 16:00
If you, right proportionately it starts to get, it starts to get tough, right? Like, if you’re just home and you, you want to DoorDash a cup of coffee, it’s like a, you know, I don’t know what it is. But $15 -$20 cup of coffee.
Karly Iacono 16:12
That’s crazy I would never do that.
Chris Ressa 16:14
So I think at the end of the day, that that has some work to do before they can compete at scale with those apps. So, I just only think that improves at the real estate level, the restaurant success.
Karly Iacono 16:33
And I don’t think it has to be mutually exclusive.
Chris Ressa 16:35
Maybe not. Maybe it’s and not or.
Karly Iacono 16:37
Picking up from the physical location.
Chris Ressa 16:37
Sure absolutely.
Karly Iacono 16:38
I think anytime you’re improving access and efficiency, you’re opening it up to more consumers.
Chris Ressa 16:38
Yeah. fair enough
Karly Iacono 16:41
As that improves, the fees come down. Maybe it’s a brand or a concept.
Chris Ressa 16:51
You keep saying fees come down. How are the fees coming down?
Chris Ressa 16:53
I think it’s gonna
Karly Iacono 16:53
Competition, right. Maybe you have more delivery points closer to the consumer, maybe the tip structure changes. I don’t really use those services. I’m not sure. But
Karly Iacono 16:56
You think fees are gonna go up.
Chris Ressa 17:06
So like, it’s like delivery fees. I gotta keep bought, like, if oil prices move up? How did delivery fees come down?
Karly Iacono 17:15
It gets internalized, I guess, how does Amazon do it for free?
Chris Ressa 17:18
I mean, they know that it’s a totally different business model. They’re not, they’re in a totally different business model than everyone else. So from the point of how do you do it profitably? I think it’s really challenging. That’s all.
Karly Iacono 17:31
And I think maybe we haven’t figured that out yet.
Chris Ressa 17:33
Yeah,
Karly Iacono 17:33
Not DoorDash, right. Maybe it’s not a third party.
Chris Ressa 17:36
Don’t know.
Karly Iacono 17:37
It’s probably drones.
Chris Ressa 17:38
It’s probably drones. There you go.
Karly Iacono 17:41
Problem solved.
Chris Ressa 17:41
Problem solved
Karly Iacono 17:42
Problem solved, we’ll move on. So why do you think all of this activity and growth and demand in the restaurant space is good for retail real estate? It’s one thing to eat up space. But do we want these tenants there?
Chris Ressa 17:54
I think the you know, we’re getting more, I think a couple of things. One, we’re getting new fresh concepts to properties. That’s good. We’re getting new consumers who are coming to properties. I think we’re getting I think one of the things that’s helping is, overall you’re getting you’re continuing to see more sophisticated restaurant operators, you know, there was, you know, we’re not getting a ton of like, just a, you know, a chef who wants to be a restauranteur, and and that there’s nothing wrong with that. But we are getting sophisticated business people who have who want to, you know, get into this because of what they think is the growth. And so I think that’s interesting, which is, you know, we’re getting, you know, really strong operators, we’re getting new concepts, new consumers. And historically, when you get strong business operators, they increase traffic, they bring new concepts, and you get new consumers, like that’s always good for retail real estate.
Karly Iacono 19:04
Are you worried about the turnover in your centers? If you were to take on maybe a new concept or an unproven restaurant? Do you worry about that turnover?
Chris Ressa 19:16
I think that is pretty deal specific. It depends on like, what were the deal terms, but what I what I can tell you is here what we were looking at a deal where this restaurant operator was a local operator, wanted a specific piece of space in our property, pretty prominent space. And in your world, I would say they came in over ask, okay, we don’t say that in leasing too much, but there they were willing to pay a significant amount of money for the space. Now we had to invest some in the space, but the deal was pretty compelling. It required us to move the tenant in there to a different Pizza space, which was accretive because the space they were moving to wasn’t a great space. But one of the things we looked at is like, is just this just another restaurant? Or is this like, the coolest restaurant within 25 miles, this person had two locations. Like, let’s start to like, how much impact will they have? Other than just on our rent roll, and I think, you know, and so maybe, if that’s the case, you’re willing to take some more risk on them, because you think they’re gonna have a significant impact. But just spending a lot of money on a low credit tenant with unproven operating history? Like, you’re taking a risk, and yeah, you’re probably worried in that scenario.
Karly Iacono 20:52
So you’re balancing demand for the space, right, overall vacancy levels, right, in that specific area in that market? How competitive you think it is with other concepts, how risky you feel the credit is. And then really what the draw to the center may be for whatever duration they’re there, versus the risk profile?
Chris Ressa 21:14
Yeah,
Karly Iacono 21:14
And the TI,
Chris Ressa 21:15
And I think the first thing right is, we’re looking at the economics of the deal. Does it work for the credit? Right, that’s the first thing we’re looking for. I think the second thing we’re looking at is like operating history. Right? And then I think the piece is like, Well, what do they do for the property? Is it getting us to the next place over the next 10 years?
Karly Iacono 21:39
How are you seeing ti requirements shift? Are you? Are you seeing them go up? Or are they going down? Are tenants being more flexible and asking for less? Because they want the space? Any shift in that? As this becomes more competitive?
Chris Ressa 21:53
Are we talking just restaurants or just deals?
Karly Iacono 21:55
Just restaurants?
Chris Ressa 21:58
I’m not sure I have like, a specific trend for you. But what I will say is that we’re, I don’t have a stat. Anecdotally, it feels like we have more restaurants investing capital in their spaces than we did in years past right now.
Karly Iacono 22:21
They’re investing their own capital.
Chris Ressa 22:22
Yeah.
Karly Iacono 22:22
Not asking you for it.
Chris Ressa 22:23
Yeah. Got more. I didn’t say that. I said there. And what I said is we’re having more restaurants invest more capital, feels like than they had previously. That doesn’t mean they’re not also asking for capital from us. That doesn’t mean that we’re not doing landlord work. It just means that
Karly Iacono 22:39
Their build outs are more expensive?
Chris Ressa 22:42
No it just means that some restauraneurs are putting in more capital.
Karly Iacono 22:46
Okay, themselves.
Chris Ressa 22:47
Yeah.
Karly Iacono 22:48
I feel like that would make the space stickier, you would hope
Chris Ressa 22:52
Depending on how that capital was raised. Yes.
Karly Iacono 22:56
Very good point. Yeah, very good point. And that is something that kind of ties into what you were saying about the operators being more sophisticated. Yeah, I think that’s an interesting piece. Like who’s the capital behind it? It’s not just a local family opening their first restaurant. There’s more layers to it, potentially. Yeah. Yeah. Interesting. Let’s talk about a few headwinds to this space. We’re obviously very bullish on it. We love the new concepts. We think it drives traffic. We touched on turnover briefly. I know there’s a lot of chatter about labor costs and inflation. What other headwinds Do you think we might have to deal with from from the restaurant space?
Chris Ressa 23:39
So the one that we hear at least at a real estate level the most is the labor issue.
Karly Iacono 23:44
Right,
Chris Ressa 23:45
Like, you know I think that’s one of the biggest ones. Clearly, everyone’s trying to evolve with technology. And so I think for some, that’s a headwind for some that’s that’s a tailwind. I think that’s
Karly Iacono 24:00
Ahead of the game already.
Chris Ressa 24:01
Right. I think for some that’s a headwind. Some that’s a tailwind. Right. For Domino’s. I think technology is a tailwind. Right.
Karly Iacono 24:08
Totally agree. Keeping them relevant.
Chris Ressa 24:10
Right for others. It’s a headwind because it’s a huge cost to invest in. And they haven’t done it before. And so I think that’s one that’s interesting.
Karly Iacono 24:22
Okay, technology. Labor, we’re not sure if that’s going to moderate. How about inflation? Cost of goods? Any concerns around that?
Chris Ressa 24:32
Yeah, I think there’s, it’s, you know, we’ve all been to the restaurant where it says, do you get some flyer and says, due to inflation, we had to increase our prices? I saw it at a bagel place. Right. So that’s, that’s clearly an issue. And clearly it’s an impacting inflation is happening more at the restaurant level than it is at the grocery store today. Correct?
Chris Ressa 24:55
Correct.
Chris Ressa 24:56
Right. So I think that’s obvious. only gonna put up, you know, get people to watch. I don’t know if that means they pull back. Or that means they trade down.
Chris Ressa 25:08
Right in the retail space we talk about trade down often. I’m not sure. I’ve seen so much about trade down in restaurants. But I think we might be in a new world order where you might start to see that if that’s how it goes rather than them not go out to eat I think you might start see trade down because I think people like going out to eat.
Karly Iacono 25:08
Right,
Karly Iacono 25:29
I think you’re exactly right. And what’s so fascinating about restaurants are there so many different levels. Yeah, you can go all the way from the most premium fine dining to fast casual, you know, down to fast food and anywhere in between with all these concepts. So it’s not like one part of the market is growing and the other stagnating, it’s new concepts at every price point every level so
Chris Ressa 25:51
and you and you know, I think in that world too I think, looks also are deceiving. So my family we love like an amazing hole in the wall where just right? It’s amazing. Like there’s a we go down in South Jersey Shore, to Avalon many weekends in the summer. And there’s this restaurant, like on the border of Wildwood. It’s like a It’s a legit Seafood Shack on the water. It’s called Hooked Up. And I, like I normally don’t like swordfish that much. It’s like tough, it’s not great to eat.
Karly Iacono 26:30
Good to know.
Chris Ressa 26:32
Good to know, and like I leave there every time. And like I go to my father in law like, do think this guy knows he has the absolute no questions asked best swordfish in America hands down. Right? And so it’s a phenomenal piece of fish but so the point is, like, you never know with restaurants, you can find that amazing piece of swordfish.
Karly Iacono 26:55
I think I meant more for the chains, right? The national chains that are a consistent experience. But yes, that’s the fun of it. There’s always these hidden gems and holes in the wall that’ll overperform. Yeah, and some underperform. But, you know, you can find them at different price points, which is great.
Chris Ressa 27:13
Yeah for sure. The we’re not short concepts right now.
Karly Iacono 27:19
And I think that’s really one of our concluding points is that, although there are headwinds, we don’t think Americans are going to stop eating out. In fact, this trend is going to continue accelerating. And although we have higher prices, we have consumer debt rising, we have a lot of issues, labor costs, new concepts are coming into the restaurant space at all these different price points. And we think that the dollars are going to be continually allocated to eating out
Chris Ressa 27:46
Yeah,
Karly Iacono 27:46
long term.
Karly Iacono 27:47
That’s what it looks like.
Karly Iacono 27:48
Let’s end on a fun note. What is we just said swordfish. So I don’t know, I guess this can count as your answer. But what is something that you have recently tried that you really enjoyed and maybe weren’t expecting? Or new concept that you really liked? Do you need the Jeopardy music?
Chris Ressa 28:10
Yeah, so one of the things we didn’t touch on. Yelp has been tracks, this data about they all these new restaurants and to give everyone context, I believe they said what was it 53,000 restaurants opened last year? Is that what
Karly Iacono 28:29
That’s what you said, a crazy number.
Chris Ressa 28:31
Yeah, its something crazy if you look at Yelp, it’s something crazy, and that was more than the previous year. And the three biggest growing categories were hotpot,
Karly Iacono 28:44
Okay,
Chris Ressa 28:45
Creperies and desserts.
Karly Iacono 28:48
Cool
Chris Ressa 28:48
I had been to Korean barbecue long ago, but I hadn’t been to one of like, these newer age hotpot restaurants that continue to open up. And I was recently in Chicago at a property we have called Randhurst Village. And we have a restauranteur, who took a former smokey bones in a 6000 square foot space. Mr. Kimchi, and it was awesome. We had lunch. We needed to roll out of there, but it was awesome.
Karly Iacono 29:23
I think really the the question is you went, you loved it. It was a great experience. Will you work this into your normal family rotation? Or is this a novelty, that you go once and that’s for any of the concepts right? There’s a big buzz around these new ideas and I’m exactly the same way. I love trying new places. I’m always up for a type of food or experience I’ve never had. Absolutely love trying new things. But will I go and maybe for hotpot you will, but will you go continuously past that first push?
Chris Ressa 29:54
So this is like a personal question for me.
Karly Iacono 29:59
I mean, no, it was more like general like do we think consumers but yes, tell me about how but will you go back to hotpot?
Chris Ressa 30:05
So, I live in I live in New Jersey and that place is in Chicago. So I don’t there’s another one. I don’t think we’re going to that one as a family. I think for us. It’s it’s a simple one, which is how we have been talking about one of the reasons retail real estate is so powerful is because it’s closest to the consumer. So I think the entertainment of like, the big entertainment, the novelty is like, the 45 minute away. But the the place that I, you know, genre cuisine agnostic. Five minutes away, but frequent often, right. So for us, I think that’s the the difference where yeah, if it’s could be a Mexican restaurant, it could be an Asian cuisine. It could be Greek, five minutes away, often. 45 minutes away, novelty.
Karly Iacono 31:11
I love that. You said that, like a true real estate. You’re like the rings.
Chris Ressa 31:17
But that’s how I think we live it. That’s how we operate. Yeah, five and
Karly Iacono 31:20
10 miles, 45 minutes and drive time. Drive time. Drive time. There’s probably a middle band in there too. Probably nice. But not except, you know, okay. I like it. What about you? I’m not wrong. I love new experiences. Like I mentioned would I go 45 minutes? That’s a stretch, right? Probably right. 30. But I would for local places I like I might extend a little further than 5,10 15, I think. But I think it’s a great way to look at it. Right? You’ll try anything once. But it has to be something you really love to make the effort to go back. If it’s not right there.
Chris Ressa 31:54
Like do you have a local pizza place that you guys do? Right? Is that a monthly thing? Or bi weekly thing? How often do you guys probably like once a month? All right, so they get you 12 times a year? Right? Pretty good?
Karly Iacono 32:05
Yeah, exactly. We’ve tried other places like that one best so. And
Chris Ressa 32:09
If they were 45 minutes away, you would never go?
Karly Iacono 32:12
Would never go right. But that’s not an experience to your point. Right? That’s a staple or a local choice.
Chris Ressa 32:19
But ah, if we go out to pizza, and I get to sit down with my family, and you know where otherwise maybe kids were running in the fridge, grabbing something going down to the playroom. I put that in the experience book.
Karly Iacono 32:36
Okay. How far would you be willing to drive for good pizzas at the five minute?
Chris Ressa 32:40
That’s the five minute
Karly Iacono 32:41
Five minute band.
Chris Ressa 32:44
Well, let me rephrase. No, I we have a spot that is 20 minutes away. And they have the best gluten free vegan pizza for my wife who is gluten free and vegan. And so I would say we get that once a month and they have like the best sauce ever. So that’s 20 minutes.
Karly Iacono 32:59
I’m not believing your five minute ring. Okay, I think it’s a little farther. But that’s very specific. It makes sense. Yeah. Nice. Well, I love everything that we covered. I think you know, to conclude there’s so many positive forces at play within restaurant development, so many exciting new concepts. And at the end of the day, it really does bode very, very well for retail real estate, in spite of all of the challenging headwinds, so I’m excited.
Chris Ressa 33:25
Awesome.
Karly Iacono 33:26
To everyone listening that was what’s in store. Thanks so much for joining us, and we will see you again very soon. Have a great day, everyone.
