The commercial real estate scene has undergone significant changes in recent years, as observed by RJ Hottovy, the head of analytical research at Placer.ai. Hottovy stated that there is a considerable demand for new and innovative restaurant concepts. A webinar by Placer.ai delved into how shifts in consumer behavior post-pandemic have influenced the real estate strategies of restaurant operators. For example, the population migration to America’s Sun Belt has made areas like Scottsdale, Arizona, extremely popular.
The webinar also discussed several industry trends:
Suburbs and rural areas, generally known for their affordable rent, are becoming increasingly attractive to restaurant chains. Chipotle has recently found success in markets with populations under 100,000, according to Hottovy. He mentioned that these smaller markets have fewer competitors and offer first access to labor.
The Quick Service Restaurants (QSR) of the future are expected to have up to four drive-thru lanes. New Shake Shack locations exemplify this trend. Data from Placer.ai revealed that a Shake Shack drive-thru in Orlando, Florida, saw a surge in visits in June 2023. Emily Durham, a webinar panelist and Senior VP at JLL, stated that the demand for multiple drive-thru lanes is unlikely to diminish soon.
Traditional indoor malls are losing relevance, but modern consumers are showing interest in outlet malls and ‘lifestyle centers.’ These centers offer a mix of dining, shopping, and entertainment options, leading to increased dwell time, as noted by Durham.
Convenience stores like Wawa and Sheetz have been investing in their food services, including pick-up windows and mobile ordering. These investments are yielding positive results in terms of customer visits. Hottovy mentioned that convenience stores are gaining more market share, especially during the evening.
Durham also pointed out that the rise in convenience store popularity could be generational. She cited the example of her daughter and her friends frequently visiting Wawa while attending college near Philadelphia.