Restaurants Are Back: Las Vegas Edition
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Viva, Las Vegas! We’ve been thinking about all of the different cities across the country with great real estate, and we just keep coming back to Las Vegas. The whole “what happens in Vegas, stays in Vegas” attitude is out as families are coming to not just visit but make Vegas their home.
Things are changing, and one of the things that are changing is the demand for in-person experiences, including dining and shopping. A major New York-based hospitality group, Tao Group, acquired Hakkasan Group in order to snag several prominent Vegas-area restaurants, including Casa Calavera at Virgin Hotels.
As commercial real estate geeks, we’re looking at all of the different ways for you to profit and expand in 2022 and beyond because that’s kind of our thing around here. So, with restaurants making a comeback, this means that entrepreneurs have overlooked profit pathways.
Ah, the overlooked path to profits is our favorite topic. Let’s go ahead and dive in.
Why Restaurants? Aren’t They Doomed to Fail?
When evaluating opportunities, it’s easy to fall into a pattern of rejecting something because you only hear what other people have to say about it.
Yes, we can make the argument that restaurants are high risk, just the way we could make the argument that skydiving is high risk. And yet, people jump out of perfectly good planes for fun.
Here’s why restaurants should be on your list of considerations:
- The product is self-explanatory. Nobody has to be told that food is good and they should try new food.
- People crave new opportunities, especially within the dining world. Fast food is losing its appeal.
- They feed off the local entertainment scene as a whole. People that are looking for entertainment aren’t going to just stop at one venue. Restaurants fill in the gaps and provide a well-rounded experience.
- People love to treat others and food is universal. Restaurants make it easy to celebrate milestones, from promotions to weddings.
Given these benefits, why do people fear restaurants so much? The cost. One of the top costs in restaurant creation is purchasing a restaurant, but that isn’t the only way to go about looking into this opportunity. You can always look into restaurants for lease in Las Vegas.
Leasing Is Freedom for New Ideas
Let’s say that you’re interested in opening your own restaurant. Pursuing a lease option means that you can test drive the idea before sinking capital into purchasing. There are multiple benefits of leasing instead of purchasing:
- Saves purchasing for later. It doesn’t mean that purchasing is off the table, simply that you can pick and choose when to take that next step.
- You get to take advantage of the local market without overcommitting your resources.
- There is less outgoing money involved compared to purchasing the property outright.
- You get to skip over the construction costs involved with building a new restaurant.
- Many restaurant leases include the equipment within the building, making it cost even less to get started.
The road to a successful leasing project for your restaurant pilot isn’t terrible, but it does have more considerations to keep in mind. Understanding the benefits and the pitfalls in equal measure is the key to success.
Building Strong Relationships From the Beginning
Every corner of the commercial real estate game is about strong relationships. Agents, brokers, syndicate wheeler-dealers, investors, property owners, joint venture types; whatever flavor of CRE soup you’re into, it requires putting your best foot forward at all times.
Hey, nobody’s perfect, but we can certainly do our best. This is where it pays off to look at not just a business plan for the restaurant but looking into the human capital side of things. That’s where many local incentives are found, through connecting with everyday people.
Both you and the property owner have a problem, but the good news is that each party can provide a solution the other side needs. Restaurants for lease in Las Vegas are open for innovating on a solid foundation.
Property owners get tenants committed to getting an idea off the ground, and tenants get a chance to try something without sinking the whole farm into it.
Staying Competitive, Food Service-Style
Commercial real estate varies strongly depending on location, especially in Vegas. Anyone interested in stretching beyond their usual real estate goals is going to be competing for a very tight number of spots.
Personnel Selection Matters, Big Time
Lining up a team of rockstars for a restaurant is no small feat. Vegas is the reigning king of hospitality in the country. Under the glittering lights should be plenty of luxury, glam, and top-tier customer service.
Does the Strip necessarily need another Italian concept? No, but it would not be wise to limit options to just the Vegas Strip.
When we say Vegas, we mean all of it, from Henderson to Paradise to Summerlin South.
Let’s set aside the location for a moment and focus on the other big component: the people. Hospitality is a demanding industry even outside of Vegas, but hiring the best people is critical.
If there’s any doubt in the selection process, turn it over to someone that does have experience in getting good people for the restaurant. Not just the front of the house, of course, but the back of the house is equally important.
Follow the Location Data
Location is super important if you’re interested in restaurant leases in Vegas, but limiting your search to the Strip limits your money in a big way. First of all, travelers have found that they don’t want the gambling and shows of the Strip. Partying on Fremont Street isn’t everybody’s idea of a good time.
Get familiar with Las Vegas and all of the various suburbs. Dig down into the data, including median home values and annual household income data. Taking the time to research yields better results than just winging your way through.
Finally, Don’t Forget About the Marketing
It is a given that leasing restaurant space in Vegas doesn’t remove all of the risks. Marketing still plays a role in a successful, thriving restaurant. Having the money to invest in business operations still goes a long way.
Yet leasing does not take purchasing off the table, nor does it mean that someone isn’t as committed to the business. These points are important to review before making a major decision like a restaurant, even if your food is the talk of the party every Sunday.
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