I am trying to determine if I should add a food tenant next to another different type of food.

One is a coffee shop/ serving bkfast lunch dinner.
The new one would be a chicken chain, no bkfast. We want the exixting store to prosper as well.
Any thoughts. ( the new store would be long term lease and new build out at franchise expense.
In Leasing Property - Asked by doug s. - Oct 7, 2010
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Answer(s)

Brent N.
Broker/Agent
Lansing, MI

Even when the lines relating to types of food and/or times of operation are more clearly different there are still several disadvantages. The tenants will either get into an unhealhty compitition to win customers from the other and/or attempt to relocate to imrove their own situation.
Good Luck,
Brent Nolan
One Source Realty
Lansing, MI

Oct 7, 2010
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Michael J. P.
Broker/Agent
North Branford, CT

Personally I always think of the McDonalds / Burger King effect. One comes to a location to eat and does not always feel like the same exact food every single day. They both also benefit from each others advertising. Twice the coverage for half the price.
Michael J. Pappa 860-949-3636 for further free consultation on this subject.

Oct 7, 2010
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Michal B.
Broker/Agent
Miami Beach, FL

Absolutely take them on. I am not sure if you have other potential tenants interested in this space but a lot of landlords are sitting with vacant spaces.
It sounds like each of these establishments will be drawing a different customer type. Coffee shops have the heaviest in/out traffic in the morning while for the rest of the day they have campers, people that come and do their work or study. On the other hand, chicken fast food restaurants like Chicken Kitchen draw crowd that want to be serviced quickly whether it's for lunch and dinner.
If I were you and had 2 tenants interested, one of which is your chicken chain and the other clothing retailer for example, I would definitely go the first one.
Hope this helps and best of luck,
Michael Bibr

Oct 7, 2010
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Evan Keith L.
Broker/Agent
Rockville, MD

I also think that you should take on the new tenant. Shopping centers all over the world have more than one food tenant. A number of choices will draw more people to the center, and will keep them there instead of having them go somewhere else because the center that they are in doesn't have a place where they can agree to eat. The only time that having multiple food users is a negative is where they are in direct competition with each other in an area of limited traffic, or when parking is limited. As anothe gentleman said, these two users would likely have complimentary traffic patterns.

Oct 7, 2010
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Carl S.
Broker/Agent
Torrance, CA

Why not? Think of auto dealerships side by side and doing very well. Also, look at food courts at the malls that are doing very well because of a combination of food services being offered at one location. Two restaurants at a strip center are fine as long as they do not offer the same thing as an example Chinese and Mexican.
Carl Sperber, Broker
ID 00590111

Oct 7, 2010
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Oscar Z.
Broker/Agent
Northbrook, IL

You should definately take on another food tenant. People want convenience. They may want mexican and decide on chinese once they are there, the point is they want to go to one place knowing good food will always be there with a variety.

Oct 7, 2010
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Will L.
Broker/Agent
Colorado Springs, CO

Bringing in a tenant in the same industry is a wise choice if they compliment each other, different menu choices, different hours of peak traffic, different demographics.

Oct 7, 2010
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Anthony L. J.
Broker/Agent
Brighton, MI

It is important to have the right tenant mix in a retail center, it is apparent that the 2 proposed uses cater to a different clientele and I would suggest that the " food cluster Effect" would benefit the center. The food retailers will definitely attract different types of food consumers are give the consumer a choice.
Also, and i suspect you have already done so, check the leases to make certain there is not a conflict. You will add value to the center.
Best wishes for a successful leasing.

Oct 7, 2010
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Frank N.
Broker/Agent
Phoenix, AZ

Doug:
Unless ther are so similar that the customer can't remember whose menu they are ordering off of, you definately want to take them on. A variety of food choices will drive additional traffic to the center, not slice up the existing customer base into smaller pieces of the pie for all tenants. The additional traffic can be good for non-food tenants as well.
As for the tenant, you'll find that most like to be near other types of food. I represented a Mexican food chain that added several local locations. The President of the chain once told me that if a center had a Burger King, or a KFC his site analysis had already been done for him - "If these guys are satisfied with the location, I am too. People that pick up chicken or burgers are the same people that pick up tacos."

Oct 7, 2010
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Marty H.
Broker/Agent
Lenexa, KS

It sounds to me like these two restaurants will compliment each other. However, I'd also consider the impact on your other neighboring tenants.....Keep in mind that two prospering restaurants will generate a lot of customer traffic which will use parking spaces. Depending on the site plan lay out and the position of each restaurant, heavy parking use could impact other tenants. In fact, it's not uncommon for some non-restaurant anchor tenants to insist that no restaurants be located near their stores.
If it is important that the chicken chain not damage the coffee shops breakfast business, you might want to ask them for a restriction prohibiting future breakfast sales.
Sincerely,
Marty Hugo
Real Estate Dynamics, Inc.
Mission, Kansas

Oct 7, 2010
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ED C.
Broker/Agent
Bakersfield, CA

I think it's a great idea to have a variety of foods to choose from, it should increase sales to the area. I've been in the Real Estate/Restaurant business for 25 years.

Oct 10, 2010
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