Restaurant Realty Sold/Leased 73 Deals in 2020
2020 needless to say was a challenging year for the restaurant industry due to the pandemic.
Irrespective of the restaurant Industries poor performance this year we had a strong year with 73 closed deals (see at the bottom of this article a list of the individual deals completed) which represents placing RRC’s 2020 performance in the top 10% of our histories past performing years in terms of number of deals done.
Unlike most years this past year has been a buyers’ market meaning that the buyer was is in the driver’s seat in being able to dictate to some extent the price and terms of the deal as well as in many cases being able to renegotiate the premises lease on more favorable terms then the past lease. Unless sellers and landlords were negotiable in most cases then deals would not happen.
What type of restaurants, bars and/or clubs sold in 2020
The businesses sold included the following:
1) a number of full-service restaurants with and without bars,
2) 3 deals included the business with the real estate (Trevor’s in San Rafael – a bar + residential unit; 15 Harbor Restaurant & Bar, San Rafael -a restaurant and bar + outdoor seating area on the water; Paradise Beach Grille, Capitola -a full service restaurant and bar with outdoor seating on the water),
3) a number of smaller businesses including ice cream stores, yogurt stores, gelato stores, coffee café and boba tea operations, juice stores and sandwich shops,
4) many pizza operations with a large emphasis of their business being take-out and delivery,
5) a gay club,
6) a food truck,
7) a number of bar cocktail lounges,
8) a couple of brewpubs,
9) a couple breakfast and lunch businesses and
10) a bakery.
Who were the buyers in 2020
The buyers included the following: 1) experienced restaurant owners, managers and employees who were looking for a deal as this past year has been a buyers’ market and 2) inexperienced buyers who came from other industries as a result of being laid off or their industry being eliminated totally as a result of the pandemic,
Our effective marketing program contributed to our continued success.
Our marketing program is largely responsible for generating buyers for our deals and is outlined below.
1) Internet Marketing Activity – Our ever-increasing activity with internet marketing contributes to drive buyers to our website. A. Placement of our listings on 10 or more business for sale and/or real estate for sale or lease websites.
2) E-newsletters sent out 1 to 2 times a week to the over 60,000 buyers in our data base. For those subscribers that don’t open the e-newletter on Thursday am when they are sent we send it again on Sunday which results in obtaining both an increased click rate and open rate high above the industry average. There are two versions of the e-newsletter – one week it includes links to our new, price reduced and featured listings and the other week version includes featured listings, information featuring a recent done deal and a featured agent of the period. Both versions feature links to our website which generate thousands of seller and buyer inquiries.
3) Purchasing key words for placement on the major search engines to enhance our paper click activity – When someone is doing a search for sale or lease of restaurants, bars, clubs or other food service-related businesses such as commercial Kitchens, food trucks, convenience stores, catering companies, etc the person doing the search is directed to our website.
4) Utilizing targeted email blasts – For listings that are not receiving a reasonable buyer response we’ll go into our buyer data base and/or create a new targeted data base of perspective buyers whose business criteria match the criteria of the business for sale. Then we will design an email which will give the highlight s of the business and include a link to the business profile on our website and a link to an NDA (confidentiality agreement).
5) Social media – We post regularly on Facebook and LinkedIn selected listings, special events and noteworthy information to increase our SEO activity. We also use LinkedIn to recruit for new positions when they become available.
6) Referrals – We receive seller and buyer referrals from past sellers, buyers, landlords, attorneys, accountants, restaurant vendors and commercial, residential and business brokers.
The outlook for the restaurant industry in the future.
There will continue to be a demand by customers for dining out and once the pandemic is behind us restaurants and bars will continue to be a viable industry. People have cabin fever from being tied to their homes for many months, they enjoy eating different types of food other than what they cook at home and view dining out as an entertainment experience as well as satisfying their hunger. With the vaccine being implemented currently, I am optimistic about the future of the restaurant industry and we currently have close to 40 deals in the works for 2021 with approximately 10 deals scheduled to close escrow in January 2021.