As many as 150,000 to 200,000 restaurants nationwide may never fully reopen again after the COVID-19 pandemic subsides, according to estimates from the National Restaurant Association. This represents 15 to 20 percent of all U.S. restaurants.
Though the metro Atlanta area’s restaurants have been allowed to reopen their dining rooms for a full two weeks following Georgia Gov. Brian Kemp’s directives in late April, early indications are that a large swath of operators are choosing to keep them closed and focus on takeout, delivery and catering. Others are making the hard choice to close their eateries permanently.
As a result, there will be a wave of second-generation restaurant space that will need to be absorbed before new restaurants are built en masse in metro Atlanta, said Tom McCarty of barbecue restaurant chain Jim ’N Nick’s during a webinar hosted by France Media’s Shopping Center Business and sponsored by Retail Specialists.
“From our standpoint, our developments are on hold for now,” said McCarty about the chain, which opened a location in metro Atlanta’s East Cobb district late last year. “The focus of the company is on getting our existing restaurants back up and running profitably. Once that happens, then we’ll start looking for opportunities.”
McCarty was the lone retailer on the webinar entitled Atlanta Retail Reboot, which provided insights into the metro Atlanta retail market as it slowly reopens. Other panelists included Emil Gullia of Retail Specialists, Kyle Stonis of SRS Real Estate Partners, Jeff Garrison of S.J. Collins Enterprises and Bill Brown of Halpern Enterprises. Randy Shearin, editor of Shopping Center Business, moderated the webinar, which drew 622 registrants.
McCarty said Jim ’N Nick’s is well-suited to operate during the crisis as drive-thrus were always part of the company’s business model. The restaurant chain also has delivery options through DoorDash and a catering line to support its eight metro Atlanta restaurants.
McCarty said that even with these options, the company is in “survival mode” and has no timetable yet to reopen its dining rooms across its 30 properties. Consumer psyche remains the biggest unknown.
“No one knows when we will have a full dining room,” said McCarty. “When do we have people comfortable coming in on a Friday night standing in the lobby on a half-hour wait, and it’s three deep at the bar while they wait for their table? Is that six months, 12 months, 18 months away?”
In addition to more second-generation space, other topics covered on the webinar included updates on developments underway in metro Atlanta, investment sales, predictions for the city’s retail real estate fundamentals, entertainment tenants, new lease languages stemming from the pandemic, rent relief for tenants, interest rates and the “human factor” in retail real estate. Click here to listen to the full complimentary webinar.
— John Nelson