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— Retail Properties Quarterly — February 2016
Restaurant Trends
R
estaurateurs have an appe-
tite for Denver, evidenced
by the fact that 235 new
restaurants opened in the
greater metro area in 2015,
according to the Colorado Restau-
rant Association. In 2014, approxi-
mately 300 new restaurants opened.
The numbers might seem stag-
gering, but dining trends and our
desire to eat out are not only keep-
ing many of these restaurants in
business, but also allowing many to
flourish.
According to a report in Bloomberg
Business News, in April 2015 dining
out sales numbers exceeded grocery
sales. That’s the first time in the U.S.
this has happened since those num-
bers have been tracked and that
trend is ongoing.
There are a number of factors
that potentially contribute to this
trend, including the fact that only
50 percent of Americans are mar-
ried and 27 percent of people live
alone, both unprecedented levels in
our social history. As a result, people
appear to prefer to go out and enjoy
a meal or a drink in a public setting,
rather than sit at home alone every
evening. Millennials, who account
for 27 percent of the population, are
marrying at 50 percent of the rate
at the same age as baby boomers. In
other words, they are waiting much
longer to settle down. The average
age of a mother in the U.S. is 26½,
an all-time high, according to the
Center for Disease Control and Pre-
vention. Given working moms, our
highly scheduled kids and increas-
ingly congested traffic, our tradition
of a home-cooked meal is being
replaced by a sit-
down dinner at a
favorite restaurant.
The choices Den-
ver diners are mak-
ing are influencing
the openings (and
closings) of res-
taurants around
town. One of the
more interesting
trends is in regard
to the décor and
price point of res-
taurants. “White
tablecloth” fine-dining establish-
ments still have a loyal clientele, but
many people are making the deci-
sion to forego a long, nice, expen-
sive evening out and instead prefer
a delicious, well-prepared meal in
a more casual environment, likely
wearing jeans, albeit expensive
ones. Affordability and the growing
millennial demographic are major
reasons for this trend. There will be
a couple new restaurants opening
this year that will buck this trend –
801 Chophouse in the Cherry Creek
Shopping Center and Quality Italian
at the new Halcyon hotel at 245 Col-
umbine St. – but don’t expect many
more.
One of the food types that is ben-
efitting from the demand for casual
dining is Asian cuisine. A number
of highly anticipated Asian restau-
rants have opened or will open soon
in Denver. These include Osaka
Ramen in Cherry Creek, Matsuhitsu
in Cherry Creek, Sushi Ronin in the
Lower Highlands, Ototo on Pearl
Street in Denver, Sushi Rama in
River North and Bar Uncle at 35th
and Larimer streets.
Patrons enjoy the healthy, creative
and delicious dishes that character-
ize Asian food, and Denverites are
clamoring for more. The owners
of these restaurants also benefit
from serving many small courses
to guests, who, more often than
not, enjoy cocktails, wine or Saki
throughout the evening. This helps
the operators achieve profitability,
while providing their guests with a
variety of treats for the senses.
Another trend that should con-
tinue in the year ahead is restau-
rants locating on the first floor of
large multifamily or office develop-
ments. Unique restaurant concepts
were welcomed into many impres-
sive projects around the city. These
restaurants bring an added level of
panache and amenities to the resi-
dents and the surrounding neigh-
borhood. As apartment development
continues throughout the Denver
metro area – while over 1,000 people
per week move here – many devel-
opers realized opportunities to
include a restaurant (or restaurants)
in their street-level space.
One reason for this infusion of
restaurants into apartment building
space is clear: market demand. As
Denver continues to grow and our
drive times increase, easily acces-
sible dining destinations will only
grow in popularity. The other rea-
son is the competitive apartment
market itself. Developers need to
position their projects with the best
possible amenities to attract tenants
upstairs.
With market demand a driv-
ing force, restaurant owners have
opportunity knocking at their door.
Yet, even the most established
brands and fledgling entrepreneurs
need to take care in identifying the
best (and most affordable) location
for their new business venture. Like-
wise, apartment developers must
find the right operator for the over-
all vision of their new residential
community.
Location is still the critical factor.
Both the restaurateurs and develop-
ers must understand that the popu-
lation of the residences provides
a captive audience with increased
frequency of visits; however, that is
only icing on the cake. The “cake”
is the neighborhood itself. Success
is beckoning for these distinct busi-
ness interests, as long as the right
combination of building amenity
and broader community support
intersect.
Major, well-financed restaurant
groups, particularly from other mar-
kets, will continue to pay top dollar
for A locations, provided that the
lease includes the complete restau-
rant infrastructure and a generous
allowance toward the build-out of
the restaurant. Their brand and rep-
utation already are highly respected
and reliable for giving their custom-
ers exactly the experience the con-
sumer wants. Landlords who under-
stand this formula for success likely
will enjoy the value of having a
strong restaurant anchor tenant on
their property for a very long time.
If you’re among the masses who
like to dine out, our restaurant scene
is experiencing an unprecedented
golden age.
s
Kelly Greene
President, Urban
Legend Retail
Group, Denver
