Since 1987, we've been distributing this publication to Atlanta's leading real estate developers, landlords, brokers, restaurant owners and operators and vendors to the food service industry. It's provided us an excellent means to keep in touch with our core audiences and make them aware of who we are and what we do. Your thoughts and comments are welcome.
Approximately 18 months ago we used the analogy of a hospital patient in intensive care when discussing the local and national economy, noting that we were out of intensive care and just starting to walk on our own in the hallway. That’s the good news. Bad news is we’re still in the hospital and not back to a “normal life.” That observation seemed to be borne out at the recent Data Bank
mid year symposium held July 31, 2011.
Featuring panels of the city’s top retail, multi-family, investment and office brokers and developers, the overall consensus was that activity remains flat with little chance of significant changes for at least 18 more months. Apartments are the most active segment, the result of people who’ve been forced out of their individual residences needing a place to live, those still in apartments and house hunting, the continuing in-flow of college kids for new jobs (which has been reduced in recent years) and grand parents who want to be close to their children and grand kids.
The commercial investment segment is still in the bar bell phase. One end of the bar bell is the quality properties (grocery anchored neighborhood centers, heavily occupied Class A office space, nationally leased warehouses) that are selling at or close to their 2007 pricing levels. The other end is the distressed properties, bank owned foreclosures, the properties that have either been on the market for a long period of time or dramatically reduced to “get them off the books.” According to Co-Star, almost 40% of the 1-5 acres land sales in metro Atlanta since 2009 are distressed sales for prices almost 30% less than their independently owned counter-parts fetched.
Some other highlights… Industrial absorption has been positive the past two quarters. An interesting fact-at least to us-is that only six and one-half percent of the vacant industrial space in Atlanta is new. The rest is either existing or build to suit. As Georgia residents we should be aware of the potential impact that deepening the Savannah port will have when the Panama Canal expansion is completed in 2014. Savannah could become one of the major ports on the Eastern Seaboard.
Another factoid of note. The average law firm today takes 40 percent less square footage per practicing attorney than ten years ago. Firms are re-configuring space with more open area to encourage a teamwork approach to their practices.
Mercer University economist Roger Tutterow, a frequent lecturer at this event, offered a bit more optimism. According to him, and numerous other economists, the recession officially ended in the first quarter of 2010. The bad news is since then we’ve had virtually no real growth in jobs, retail sales or new housing starts. While energy prices are declining, at least for now, housing values remain flat, or in some cases negative, resulting in less consumer confidence. According to Tutterow it will take two a and half percent annual growth for the next 3-4 years to get “healthy.”
The economy may still be struggling but the restaurant sector continues to expand. At least that’s the consensus of the 80 members of The Retail Brokers Network’s Restaurant Council. On the groups’ most recent monthly conference call, there were consistent reports of new activity and expansion in most major North American markets. While rent reductions are still under consideration, many companies are expanding, trying to take advantage of the market. Among the most active – Darden, especially Olive Garden and Seasons 52; Buffalo Wild Wing; Smashburger; an untold number of yogurt concepts and Texas Roadhouse.
Many Atlanta restaurants are doing their part to help grow the economy back. Café at Pharr will soon open their fourth location at Town Brookhaven (along with newcomers Treza Woodfired Pizza, Bua, Stir Crazy, Swirl Frozen yogurt, Olive Bistro and The Flying Biscuit.)
Look for second locations for HankookTaqueria and Café Agora in Midtown; a second Verde taco on Collier Road, a second Farm Burger, in Buckhead; Grant’s Tavern, a sports bar concept at Cumberland from former UGA and pro player Charles Grant; the re-opening of Red Fish, Memorial Drive, as Bar One; Chef Ryan Aiken’s Harbor Bar and Fish House, in Decatur; and new owners at Brooklyn Bagel, Alpharetta.
Some other new restaurants of note: Five Napkins, Midtown; three new Italian Eateries 246, Decatur; and Double Zero and Cibo e Beve, Sandy Springs.
Other newcomers of note include Leroy’s Chicken
, soon to open Georgia Fish Camp
, from Chef Ford Fry (both on Howll Mill); Swit Bakery and Café
going into the Brickworks on Marietta Street and Ocean Prime
, with a major overhaul of the former Sambuca on Piedmont Road.
It seemed like a good idea at the time…
As part of a season-long promotion Atlanta area Moe’s
gives every fan in attendance a free burrito if the Braves hit a home run during a designated inning. At a recent game, featuring the retiring of former manager Bobby Cox’s number, it was bombs away for the Braves in front of a packed house.
The result, several thousand free burritos served the following day at the 60 Atlanta area locations.
Great quote department…”The decor writes checks the food can't cash.”
We looked at spending data for the largest 100 cities in the U.S. by population and determined which cities spent the most and ate the most often at the following national fast food chains: McDonald’s, Wendy's, KFC, Taco Bell, Subway, Pizza Hut, Arby's, and Burger King. The results? In our fast food nation, Plano, Texas is America's fast food capital. Residents of the northern Texas town, a suburb of Dallas, spend 2.3 times more than the national average on fast food, and order 2.1 times more at fast food joints than in the average U.S. city. Other top fast food cities were also from the South or Midwest: Madison, Wis. ranked second and Wichita, Kansas third. Cities that ranked at the bottom of the list tended to be coastal cities: San Francisco ranked 91st, spending 47 percent less than the national average.
When we’re not eating fast food where do our food dollars go? Just under 10% of total income is spent on food expenditures, according to the U.S. Department of Agriculture. Of that approximately 2/3’s (6-7%) is spent for at home consumption and the remainder for dining out. What’s interesting about this is how the numbers have changed. In 1934, the average expenditure for food represented 24 % of income. By the early 1990’s that number had shrunk to 10% where it’s remained fairly consistent for the past 20 years. Food purchased for consumption outside the home has steadily risen to where it’s now approximately 4% of total expenditures, or 40% of dollars spent on eating During the past few years, there’s been a slight reduction as people cut out dining out of the house.
One place increasing number of Atlantans are spending their food dollars are local farmer’s market. At last count there were at least a dozen in the Metro Atlanta area held virtually every day of the week. The granddaddy of them all is still the Peachtree Road Farmer’s Market, presided over by restaurant honcho Linton Hopkins. Other markets of interest include Sandy Springs, East Atlanta, Grant Park, the recently opened Brookhaven event-which features Bloody Mary’s from Haven’s friendly bar staff- and Clarkston-which may be the most diverse in the metro area. The small Dekalb County enclave boasts residents from over 100 countries and the produce selection reflects the patron’s tastes.
Esquire Magazine’s annual list of the best bars in America included four local drinkeries including The Clermont Lounge, One Flew South (concourse E at the Airport), Manuel’s Tavern, and Holeman & Finch Public House.
Georgia restaurant owners, just barely recovered from the Great Recession , now have a new worry-increased activity by Georgia Dept. of Revenue field agents. In the past two years the department has doubled the number of field agents and have targeted restaurants and small businesses for increased scrutiny according to Bob Wagner, the go to accountant for many of Atlanta’s restaurant owners.
According to Wagner, the agents are focusing on several areas including whether or not taxes have been paid for any furniture fixtures and equipment purchased outside of Georgia (even if purchased through a distributor); an attempt to tax mandatory tips as income; collecting fees on equipment leases – for such items as dishwashers – and finally collecting tax on items ordered on the internet. The goal is to raise $5 in additional revenue for every $1 in additional overhead cost so expect increased scrutiny. Simultaneously, the Georgia Department of Labor, empowered by the recent passage of the state’s stringent immigration laws, will be more closely monitoring restaurants.
Spotted on a t-shirt in Las Vegas – “What happens in Vegas stays on Facebook and You Tube forever.”
Bloggers beware….a court in Taiwan sentenced a blogger to two years probation and a $7,000 fine for writing a negative online review. His review, which cited a restaurant’s poorly seasoned food and bug infestation problems, was declared libelous because it was based on only one visit to the restaurant according to a local judge. While it’s doubtful that a similar decision would be rendered in this country it is interesting to note that the internet is a virtually uncensored wild west of opinions, mis-stated facts and observations, many from anonymous sources. As we all know, once it gets on the internet it stays there forever.