Third time’s the charm

25Jun10

On the way to the grocery store, I often pass a particular restaurant space that seems to change hands every year. First, it was some nondescript expensive restaurant, then a slightly less expensive eco-conscious concept, and now it’s an upscale sushi place. And I doubt the location is the problem, since it’s close to numerous hotels and gets a lot of foot traffic.

So what’s the issue here? A few possibilities come to mind:

– The rent is too high

– The inside of the space is uninviting

– The restaurant tenants don’t know how to attract customers and keep them coming back

Interestingly, at least two and perhaps all three of these factors are within the landlord’s control. They could lower the rent, renovate the interior, and even refer the tenant to marketing firms who know how to build a following for a restaurant. Sure, this is way more effort than the typical landlord wants to put in. But every time a tenant goes out of business, it means lost rent and more costs paid for buildout and real estate commissions.

Returning to my original example, I can only hope the landlord or restaurant tenant #3 get their act together soon. Otherwise, I fully expect the fourth restaurant in as many years to be opening in that space by next spring.



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