Understanding the Real Estate Restaurant Space

Be prepared by knowing common terminology in the restaurant space

Any commercial real estate broker or agent can negotiate a restaurant lease or sale. However, if an agent is not extremely familiar with restaurant space, their lack of knowledge can result in being costly Restaurant Space - Sinksto their client. This is true because the restaurant business works on very tight margins so negotiating ineffectively, on behalf of your client, can leave them little chance of success. In order to be effective in dealing with a restaurant lease or a restaurant sale, the broker or agent needs to understand restaurant space lingo. This includes being able to use the right terminology, whether the conversation is about buying, selling, or leasing restaurant space. This type of language should be understood so that the commercial broker will be prepared to effectively negotiate on behalf of their restaurant client, and give them the greatest chance of success.

What to be aware of when purchasing restaurant real estate

Below are some equipment and infrastructure items to consider when negotiating your restaurant lease or purchase:

  • Is there a Grease Trap? Grease traps are designed to intercept grease before it enters the wastewater system. Common waste water will have a bit of oil that will get into the septic tank and will result in a layer of floating scum. However, sometimes there can be larger amounts of oil, as a result of the food production, which can result in sewage overflow into the environment. Other types of fats and greases,, that are used for cooking, can solidify and cause blockage in the pipe system. These types of blockage are often found in the underground pipes, and require a pumping company to remove the blockage from the restaurant space and general environment.
  • Is there a Hood System? A hood systems are devices that contain an exhaust fan that hangs over the equipment used for cooking. The purpose of the hood system is to dispose of airborne grease, smoke, steam, fumes, smell and heat. The hood system vents these air pollutants through a ventilation system that sends it outside.
  • 3 Compartment Sink/Hand Sinks/Produce Sinks-Restaurant spaces are in greater need of extensive plumbing than most other retail uses. If these items are already in place, this can save the restaurateur quite bit of capital.
  • Walk in Cooler- Typically, a restaurant space will in need a cooler and freezer. While a restaurant can purchase upright reach in coolers and freezers, those pieces of equipment aren’t nearly as efficient as having a walk in.
  • Ingress/Egress-With so many restaurants to choose from, consumers are more convenience driven. Consumers want the restaurant to be easy to get in and out of and not require U-Turns or hold their breath to cross several lanes of traffic. Try to identify sites that are easy to get in and out of from all directions.
  • HVAC-Restaurant space typically requires a significant amount of additional HVAC tonnage. This is due to the following variety of reasons:

o   Heat generated from cooking equipment

o   Hood System removing conditioned air from the building

o   More people coming into the restaurant creating body heat as well as the door to the restaurant opening more and letting the unconditioned air into the space.

  • Parking-Unlike general retailers, Restaurants have shorter times to make their revenue. The lunch and dinner day parts have larger influx of patrons and therefore greater parking is required.

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While there are many more points to consider when negotiating a good restaurant lease or purchase, the above points will definitely put you into a stronger position. Consider selecting a commercial real estate broker that deals only with commercial real estate and specializes in restaurant spaces.

Click here to find this author online, Michael Carro, or for another article by Michael Carro, read “How to Select the Best Restaurant Real Estate Location“.

Advisor Top BarRestaurant real estate broker in Pensacola, Florida

About Michael Carro – Based in Pensacola, Florida, Michael has extensive commercial real estate experience and has earned many awards for his accomplishments. His passion is with restaurant real estate, and he is the host of The Restaurant Realty Show on News Radio 1620AM. Click here to read his full bio, or if you would like to contact him, you can call him at 850-434-7500, or email him at MCarro@SVN.com. You can also follow him on Twitter at @MichaelCarro.