Sep 17
For the past 20 years, Jason Baker has helped retailers the likes of Darden Restaurants, Cava, and Fox Restaurant Concepts expand in the Houston metro.
Like many retail real estate brokers, a good part of his time these days is spent introducing new food-and-beverage brands to the market. Vibrant restaurant lineups not only produce traffic, but tend to re-energize and re-calibrate centers and neighborhoods.
Chain Store Age asked Jason to give us a rundown on the restaurant scene in Houston.
At high-end mixed-use centers, restaurants have become the new anchors. How chancy is it for landlords to choose the correct food-and-beverage tenants in your region?
Landlords are stepping up in unique ways for strong brands, but they also have to have a strong guarantee. There have been successful concepts coming into Houston that just don’t translate here, and a lot of them have under-performed. So there’s risk associated with this for landlords.
Do they depend on brokers such as yourself, then, to forthrightly help pick tenants that will be sticking around for a while?
Landlords almost always have a good list of choices. They have plenty of options. So they have to choose restaurant tenants whose food and brand they really believe in. The role of the broker is the same in this.
Who’s a national operator that’s done well in Houston?
Sam Fox, the founder of Fox Restaurant Concepts, is one. He has successfully opened several concepts, such as Culinary Dropout and The Henry. His natural food concept Flower Child is popular in Houston and other big Texas markets.
Margins in food-and-beverage keep getting slimmer, though, don’t they?
A friend of mine who is a big operator of full-service restaurants has told me that his topline sales and revenue are good, but that he’s been making less money due to labor pressure and cost of goods. The cost of everything — sugar, limes, salt — is up and profitability is getting squeezed like never before.
McDonalds shut down several California locations after the state passed a minimum wage bill of $20 an hour for fast-food workers. Is this a roadblock for expanding restaurant chains?
I had a conversation about this with the CEO of a client of ours that operates a lot of restaurants in California. Because of these higher wages, higher rents, and a higher regulatory environment, he said California is going to be a place that is going to make expansion there hard for them.