Atlanta Restaurant Real Estate
This Week on The Street (A more or less regular compilation of news, factoids and observations.
August 12, 2016
by Harold V. Shumacher
The Next Destin ?
Marketers have called it the “Forgotten Coast, ” the stretch of beach and barrier islands heading east from Panama City toward Tallahassee. It may have been overlooked in the past, but ever since the gulf oil spill, in 2010, this stretch of Northwest Florida has been increasingly discovered by Atlanta based, and other visitors.
Signs of development are everywhere, new houses under construction, small businesses and restaurants opening, especially in the towns of Port St. Joe and Apalachicola, the most developed of the small cities in this area.
Having been a long time devotee of the Grayton Beach/Seaside area it’s been a nice switch to see the Florida of old, one void of condo’s, water parks, outlet malls and mini golf emporiums. Instead, the main attraction is relaxation on long stretches of white sandy beaches that are lightly inhabited, even in the heat of the summer. One of the attractions may be that many of the beaches are dog friendly -though leashes are required.
For those headed this way, there are few accommodations other than rental houses. Summer rental rates run around $100-$125/bedroom per night for 5-7 day minimum rentals.
Restaurants tend to the straightforward, locally fried or grilled seafood, a smattering of sports bars and Mexican cantinas. We enjoyed Indian Pass Raw Bar (8391 County Road 30-A,) featuring freshly shucked, and harvested oysters from the nearby bay. The lines to get in-first come, first serve- are lengthy starting at 11:30 a.m. and lasting throughout the day and early evening. The comfortable porch and self serve beer cooler, in the rear of the restaurant, tends to help the time pass.
Less crowded and a bit more convenient, for us, was Coneheads (980 Cape San Blas Rd.), a family friendly beach spot with great clam chowder, fried and grilled local seafood and a smattering of salads and sandwiches. Most evenings there’s entertainment on the shaded patio.
Are there too many seats or customers spending too little?
With the surprise closing of Jay Swift’s 4th & Swift restaurant, a pioneer, in the revitalization of the Old Fourth Ward, and rumors of others to follow, we have to wonder if there’s too many restaurants in an already crowded in-town market or customers not spending enough. There is evidence to support both theories.
According to the Georgia Restaurant Association, the number of restaurants in the City of Atlanta increased by 11%, from 2,980 to 3,332, between 2008 and 2015 with many of those in the core markets of Old Fourth Ward, Inman Park, Virginia-Highland, Midtown, South Buckhead and Buckhead. If you use an average of 100 seats/establishment that’s over 35, 000 new seats. If you reduce the size, to 50 seats, on average, that’s still over 17000 new seats that need to be filled one to three times a day, six to seven days per week.
When customers do come to restaurants they’re spending less. At least that’s the finding of Net Financials, an accounting firm that has been tracking local restaurant sales since 2010. Based on the responses of over 100 locally owned and operated restaurants, 46 % reported that sales had dropped from the previous year. In fact, the last three quarters of 2015 showed the weakest revenue figures for the past six years. The first quarter of 2016 has shown a slight uptick but it has yet to be determined if this is a trend or an anomaly.
Adding to the woes, apartment rentals continue to increase, averaging $1.74/sq. ft. (per month) with several newer projects in excess of $2/sq. ft. For cash strapped millennial-rent is now approaching 30 percent, or more, of their income further compressing what’s left for restaurant spending.
With little sign of new growth declining, based on the numerous projects underway, most of which include restaurant and retail locations it will be interesting to observe what the next 9-12 months bring.
When I moved to Atlanta, some 45 years ago, I was told you’ll never make a mistake buying and holding Coca-Cola stock or land on Peachtree Street. Sadly, I didn’t follow either of those admonitions strongly enough so remain a working stiff. For those who did, there’s good news, especially for land owners on Peachtree Street. According to recent figures from the Fulton County Tax Commissioner’s office, land on Peachtree represents about four percent of the land area in the City of Atlanta but 38 % of the value.
Recent Transactions for the Shumacher Group, Inc. include the following. For a more comprehensive summary please visit our web site www.shumacher.com.
Land and building Sales
Bojangle’s, land purchase, Powder Springs Rd. –Austell
Purchase of Bruster’s Ice Cream, land and building Due West Rd.
Purchase by Mad Italian of property and building on Savoy Drive formerly Allure
Leases of Property
Babalu-33 Peachtree Place (West Peachtree & 9th St.)
Papi’s Cuban and Caribbean Grill-Emory Point
Former Hi-Life Norcross
Sale of Existing Businesses
Four smashburgers Franchises
Monkey Joe’s Duluth
Chastain Tavern to Rosati’s
Sale of Genco Athens
Colbeh – Decatur Square
