At one point, restaurants were not considered desirable tenants in shopping centers. Times have changed, however, as landlords seek to replace anchor stores in U.S. malls that are closing — particularly as shopping increasingly moves online, CNBC reported.
“I remember trying to find leases and people were like, ‘No. We don’t want a restaurant in our building. It’s going to decrease the value because of problems with smells or whatever,’” said David Chang, a restauranteur. “And now, everyone wants a restaurant. Restaurants now are anchor tenants in buildings. That’s a joke.”
Restaurants and other food tenants used to take up just 10 or 15 percent of a shopping center a decade ago. They occupy anywhere from 20 to 40 percent today, according to research from real estate services firm the CBRE Group. As a result, malls and shopping centers are offering more upmarket dining options.
“In the old days, food courts had indistinguishable food,” said Jerry Storch, chief executive officer of global business and management advisory firm Storch Advisors. “Now they have destination restaurants, [and] upscale and fine dining restaurants. People go for the food.”
More and more “anchor stores” at shopping malls across America are being replaced with restaurants because popular ones like The Cheesecake Factory draw just as many customers, offer a more unique and personalized experience and are more resistant to the consumer habits that seem to be increasingly migrating online every day. In a $30 million renovation to the Oakbrook Center mall in Oak Brook, Illinois, for example, the former Neiman Marcus store was subdivided into two restaurants: Perry’s Steakhouse and Old Town Pour House.
“Restaurants are viewed as strong traffic drivers that draw frequent and regular customer visits, which create opportunities for the neighboring retail offer,” according to a CBRE study. “For retail landlords, expanding a restaurant offering is a way to counterbalance the declining sales seen in low-growth soft goods categories and build a tenant mix more resistant to eCommerce penetration.”