Feast or Famine: Pandemic Changes Recipe for Restaurant Real Estate
October 22, 2020 | Tom Yeatts and Michael O’Connor | S&P Global Market Intelligence
The spate of restaurant closures brought on by the pandemic is creating opportunities for big chain eateries to expand their real estate footprints, even as many restaurants refocus operations on delivery and takeout services that require fewer square feet.
Nearly 100,000 U.S. restaurants indefinitely suspended operations or closed permanently during the first six months of the pandemic, according to the National Restaurant Association. Restaurant closings are expected to continue during the fall and winter months, compounding challenges for landlords tasked with filling space vacated by bankrupt retailers.
Independent, mom-and-pop restaurant operators will continue to suffer disproportionately in the mandatory reduced occupancy environment, and larger, well capitalized chains may seize opportunities to expand while lease terms are favorable to tenants, according to Peter Saleh, a managing director and restaurants analyst at BTIG.
