Urban environments are brimming with people opting to live in mixed-use spaces. Apartments and condominiums being purchased and rented, and at a furious pace, are driving more of an urban environment — even in the suburbs. The ability to live above or near some retail or restaurant space is especially attractive to millennials, and they are looking for quality within walking distance.
Mixed-use space brings some benefits and some challenges, so be sure to explore both before falling in love with a space up for lease. What are some of the pros and cons to help you decide if mixed-use space is right for your restaurant?
One of the most obvious benefits of a mixed-use space is the notion of having a built-in customer base. While this is technically true, the match of concept to the demographic inhabiting the mixed-use space is incredibly important. Do some homework to see who exactly will be buying or renting above and around the retail space. Understand the surrounding neighborhood, as well, because you are going to need to be a destination for non-residents to experience growth.
Chef Chris Karetas considered the location and surrounding Kearny Mesa neighborhood in San Diego when he opened CARVE. The surrounding office parks, airport, industrial spaces, and hospitals offered much more in potential sales than the condos surrounding the modern deli, and Chris is busy planning for successful expansion of the existing operation. Catering, platters for meetings, and deliveries are all options during a time when most of the residents are out of their homes and resident sales drop. Chris plans local beer tap takeover events and makes sure the regular, hearty menu is there when residents return from a long day of work.
Understand Exactly What the Developer Wants
Some groups that manage mixed-use properties already have a vision of what they want to see in their development. Some developers have a broad view of what they think the optimal addition to the neighborhood would be, while some are rather specific. There are lease agreements that mandate what hours a tenant should be open, and that won’t always make sense for all concepts.
These guidelines are often made with a large industry player in mind that will help draw loyal customers to the location and offer a selling point to the properties. Be sure to find out what expectations are upfront so your late-night dinner concept doesn’t have to turn around and do a Sunday brunch. Deviating from the concept you are passionate about because you think you can “make it work” is not a successful plan.
Explore Your Options
Mixed-use space can offer additional bonuses with the residents that live nearby. Consider offering a menu that offers quality to-go options. Having a strong to-go game will be a lifesaver for busy, working people, and families living nearby. Work on packaging that presents quality, keeps sustainability a priority, but also one that doesn’t increase costs too much. To make up for some of the expense tied up in quality disposables, recyclables, and compostables, consider offering your space up for events.
Often, large developments have a clubhouse or room that can be rented out for special events, but that requires work on the host’s part. Imagine the return on investment if you spent some time planning all-in-one solutions for a variety of life events that nearly every one of your neighbors will be celebrating.
Look at your staff, dining room layout, and equipment and figure out what you can offer for special events. Whether it is simply closing off part of the establishment and simply treating groups as large parties, or closing the restaurant and offering tray-passed service and live music, people nearby will appreciate the options and the convenience of simply walking home when the event is over.
Keep It Fresh
There are a variety of ways to get customers to come back, especially if you are banking on the built-in demographic factor. Don’t be overconfident and consider the market surrounding your mixed-use space as a “captive” market – that mentality breeds laziness with quality and execution, and will prove to be a costly mistake. A loyalty program would be a great fit for guests that share your property management company or live in the immediate neighborhood.
Another way to keep guests coming back is offering specials – something fresh to mix up the menu they have grown to love. A one-time special is a risky move, unless it is heavily promoted, or you simply aim to sell out by the end of the day. Selling out of an item can work in your favor with some guests, suggesting the item was so good, they’ll need to make a conscious decision to get there earlier. Don’t stop creating, or nearby residents will tire of the “same old food.”
The pressure to keep the menu fresh and offer quality every time is increased for establishments in mixed-use spaces. Consistency in execution and service paired with real reasons to return will help build lasting relationships with tenants, turning your establishment into a hub of local activity.