CIRB News & Transactions
News 02/02/2004 : Greater Boston Update: Corporate Realty Advisors, John Dennis, President Greater Boston and New England continue to see the expansion of national chains such as Darden, RARE Hospitality, Brinker, Texas Roadhouse, Applebees etc. with Darden and Rare Hospitality leading the way.
As these companies vie for limited real estate opportunities, market rents continue to reach new heights with $200,000 - $300,000 per annum “asking” rents for “pad-ready” ground leases for the best locations in premium markets, and deals being completed in excess of $200,000 for the first time. Sales in this under-penetrated market appear to justify aggressive rents – Texas Roadhouse has opened four of its top ten units in the country in New England in the past two years.
Darden Corp. is making good use of its ability to team concepts and take down larger and more complicated development opportunities with the expansion of Smokey Bones into the region to complement Olive Gardens aggressive expansion campaign. CRA is also using its ability to team complementary concepts and companies to become more competitive in the market place.
Darden Corp. will open over a dozen new units in New England in 2004 followed closely by RARE Hospitality with its Longhorn and Bugaboo concepts.
The 99 Restaurant (O’Charley’s in other parts of the country) continues to fuel an aggressive growth campaign primarily through conversions of existing restaurants and Applebees which has enjoyed a solid market build-out is pushing out further into tershiary markets in northern New England.
TGIF and Ruby Tuesday remain relatively quiet though TGIF has shown signs of reinvigorating New England development as of late.
On the quick-casual front, Panera Bread has continued to expand unchallenged throughout this market though they have expressed concern over the emergence of the Fresh City brand from exclusively urban environs (a market that Panera has judiciously avoided) into the suburbs. While Panera is has a much broader breakfast menu, Fresh City has the potential to compete very effectively with its high quality and varied lunch menu as well as enjoy a substantial dinner business which Panera has never really pursued.
Krispy Kreme continues its deliberate march through the market garnering high quality real estate in top markets – its Medford, Massachusetts unit was the #1 opening in the history of Krispy Kreme – over $500,000 the first week.
In the fast food sector, Wendy’s and YUM Brands continue to duke it out for the best available fast food sites with YUM employing its ability to team brands and spread costs to some early successes.
Prospects for 2004/2005 seem strong with sufficient new retail developments coming on line fueled by Lowe’s, Target, Home Depot and Wal-Mart to provide a number of pad opportunities in the market place and with a renewed aggressiveness and ingenuity on the parts of companies like Darden, RARE and Brinker to create opportunities in markets and at locations that have not otherwise been viable.
Return to News & Transactions
|
|
