First I would recommend reviewing you tenants lease; if in fact the lease states that a condition of the lease is that the tenant's restaurant had an exclusive right to the strip. Bringing in a new restaurant would risk breaking the lease. You need to consider how valuable you existing tenant is compared to the potential of the prospective new restaurant tenant. Examine if they are indeed competitors or if the addition of the second tenant would in fact help the cash flows of the first. Many retail studies show that when there are multiple different competing restaurants in a close proximity to each other, they all make more money by the synergy created by drawing more customers to the location. Talk to your current tenant and open up a dialog about their concerns. I believe that with some discussions addressing their key interests that your will be able to amend their lease to allow another restaurant.
In discussions ask you current tenant how many times they ate at for example, the Thai place, and when leaving passed another restaurant and reading menu posted outside, and said “sounds good let’s try this place next weekend” The same will hold true for you current tenant the new restaurant will bring them customers also.
Feb 1, 2011