As our Streetsense Hospitality consultants travel the world conducting market surveys, developing concepts, and visiting clients, like everyone else in our business we are struck by the amount of “for lease” signs and dormant restaurant and retail spaces. But as the market slowly returns to a new normal, the operators who lost their spaces due to any number of Covid-induced reasons and the property owners who lost them are all busy plotting their next moves. So, what’s the best way to ensure that both landlords and operators achieve long-term success?
For many, seeking out an experienced, established, and reputable operator is the right path forward. Never have successful operators been more willing to expand beyond the independent brick-and-mortar lease and take advantage of reduced start-up costs, a built-in customer base, and the often-established infrastructure of a mixed-use or hotel restaurant space. Even with this growing interest, how does an owner or developer decide who is the ideal fit and how to not only reach them, but sell their vision for the property?
Even before the pandemic completely flipped the hospitality industry on its head, the evolution of the hotel restaurant had already been the subject of industry-wide discussions, imploring real estate developers and owners to treat their F&B programs and venues as essential elements to their portfolios. As lifestyle brands and boutique hotel operators continued to evolve what a hotel restaurant could be by following the lead of such luminaries as Ian Schrager and more recently, Andrew Zobler (The Ace, Nomad, et al.), larger, more prominent, multi-property brands began to see their F&B venues as a major driver of not only F&B revenue, but also a positioning tool, a facilitator for occupancy, and even a driver of room rate, while achieving true destination dining status.
In turn, residential and mixed-use property developers also began to take notice of how attracting compelling concepts and known chefs could serve as key amenities for both residents and corporate occupants, giving them a leg up in the race to fill their properties with more desirable tenants. As hotels and mixed-use developments continue to gain traction as not only a viable, but often preferred methods of expansion for today’s most talented creative food and beverage operators, finding the right partner to help maximize these assets requires a strategic and focused approach.
Market Assessments & Personal Research to Inform the Operator Search
The first step in identifying any successful concept and finding the ideal operating partnership share the same initial methodology; a comprehensive and exhaustive market survey and assessment is required to inform search parameters. Although no two markets are the same, the market survey should always contain an in-depth dive into the local, and sometimes regional, competitive food and beverage landscape.
By personally experiencing all relevant hotel, mixed-use, and independent restaurants and bars in each market, the best search requires a robust understanding of the operators and their level of overall quality and conceptual focus to ascertain what is over-represented and what is absent in the market. Also crucial to the market survey is a deep dive into the visitor demographics, travel statistics, and the core audience profiles to solidify the F&B positioning of the venues in scope, to stand out amongst the competitive set, and to create destination status amongst the target audience in the market.
By leveraging an experienced and savvy internal team of knowledgeable industry experts who live and breathe food and beverage as well as the opinions of a robust list of trusted local tastemakers, industry contacts, and food and beverage journalists, skilled consultants can deliver unique insights that will then determine the right operators to approach. This boots-on-the-ground approach is the only true way to ascertain what is needed in the marketplace, but also provides invaluable information on what and who may be coming to the market so there are few (or no) surprises once the final decisions are made by ownership.
Operator Outreach & Building Trust Through Shared Goals
Once the conceptual gaps and opportunities in the marketplace are identified, operator outreach begins with an equal mix of creativity and salesmanship with one goal in mind; to champion the needs of both the ownership group and the operator to set the partnership up for the best chance at success. This starts by taking both the creative abilities and goals of the potential operator and matching them to the overall financial and conceptual goals of the ownership team and property.
Although there is no “right” way to conduct this outreach, a clear and comprehensive knowledge of the potential candidate’s philosophy, conceptual focus, and operational structure and abilities is crucial. When choosing a team to conduct a search, it is key that the members possess experience in all aspects of food and beverage operations to not only determine who is appropriate, but to make the potential candidate feel at ease with the potential partnership from a purely logistical angle. Starting off on the right foot with a shared knowledge of exactly what is required to execute a concept cannot be underestimated and sets the expectations and parameters, creating trust that will carry through the entire process.
Creative Problem Solving vs. Direct Conceptual Match
The most successful searches always have one thing in common; that the group conducting the search is comprised of seasoned operators and conceptual minds (not as easy a combination as one may think) that are able to see the big picture. Often, properties, kitchens, and bars are designed and constructed before an outside operator is even considered. In the welcome event that they are developed with this in mind, they are often done so several years ahead of opening which can create issues with competing concepts on both the independent and hotel side that may have entered the market during construction of the property.
Laurel Brasserie & Bar – Grand America Hotel Dining
This is where the knowledge of the potential partner’s business become paramount. By determining the flexibility of the operator’s goals and conceptual focus early in the process, there are more possibilities for creative solutions that can help to eventually secure the deal. Does the operator have a full-service Mediterranean concept that may be adapted to a smaller space to deliver a small-plate mezze menu? Does the operator have a world-class beverage team that could execute a stellar wine and cocktail program in an under-utilized space that’s ideal for a bar? Does the chef have a background in Southern Italian cuisine and has been working on a new concept, even though she is currently known for her award-winning, French-leaning menus?
Many of today’s most successful concepts have been developed by creatively exhausting all possibilities with both ownership and operator. By always considering the findings of the market survey in tandem with the operator and ownership’s goals, innovation can thrive, thus delivering something truly unique and special to the market.
Local Capture & Realizing Food & Beverage Potential
It’s no secret that the lifestyle and boutique hotel (and to a lesser, but as important extent, mixed-use) movement has theoretically created not just neighborhood hubs, but neighborhoods themselves. In turn, food and beverage venues within these properties have had to elevate their execution to become true destinations and not simply as-good-as-they-need-to-be places to conveniently grab a bite. With this profound change in perception, these venues have thrust themselves into the competitive mix that includes independent restaurants and bars and must therefore create immediate buzz and cache to attract the local guest.
When deciding whether to seek out a big-name chef or operator, the in-person, comprehensive research aspect of the market survey will also help to determine whether a local, national, or even international, search is the best path to creating a successful concept. New Orleans is a vastly more nuanced market than New York City or Los Angeles in terms of acceptance of outside operators and chefs. The tastes of Miami residents may require more international influence than those in Dallas or Denver. Exploding post-pandemic developers in Austin or Nashville may be feeling some blowback from residents who feel alienated by the incessant change and growth.
In the current and future F&B climate, maximizing the ownership’s asset can only be realized by appealing to, and attracting the type of local who views dining out as their preferred source of entertainment. By appealing to their sensibilities and delivering a product that is inherently local – even if executed by a talented chef or beverage director from out-of-town – ownership can help establish their property as a thriving and invaluable asset to their city.
Market Kitchen in W Algarve
While no two operator searches are the same, getting a head start with a CBRE professional can greatly increase an owner’s ability to find the appropriate partner. Eliminating the infrastructure, space, and equipment headaches that come with trying to fit a square peg into a round hole saves everyone time and money and the CBRE & Streetsense team is uniquely positioned to deliver both the right space and identify the ideal operating partner to maximize food & beverage assets.
Our Hospitality team brings together strategy, design, and operational know-how to create one-of-a-kind guest experiences around the globe. Explore our hospitality offerings to see how we combine award-winning interior architecture, branding, marketing, and expert-level food & beverage consulting to unlock value for the hospitality industry. For more information on operator searches and other hospitality consulting services, reach out to Ed Viita Managing Director, Hospitality.
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