So how is a restaurateur supposed to navigate a landlord's market? A good start might be to figure out what that means, what landlords want from a tenant, and what other restaurateurs are doing to stay competitive.
Before you can compete in a landlord's market, it helps to know what you're dealing with. In many cities across the country, a major factor in rising lease rates is, of course, development and growth. Darren Tristano, president of the restaurant industry research firm Technomic, argues that cultural changes are also in play. Tristano says that the rise of delivery and takeaway has shifted dining out of the restaurant and into the home, prompting even full-service operators to look for smaller dining rooms.
Isabella's own restaurant empire has felt the intermingling effects of both shifts. Last year, he opened two full-service restaurants with smaller footprints in Ballston, Virginia (which, it should be noted, was a rather under-tapped market just outside of DC). But Isabella found it was harder to make money at those two concepts, Pepita and Yona.
While they're located in more affordable real estate, they come with a much higher overhead than a fast-casual restaurant — there's waitstaff to pay, for example. And they're surrounded by the likes of Subway, Sweetgreen, and the local sandwich chain Taylor Gourmet. People don't seem to have the time or inclination to dine out at lunch so much anymore, Isabella says, so they gravitate toward those chains that can get them in and out quickly.