One of the more difficult decisions facing a restaurant owner in selecting a site is whether to build out from a vanilla shell or take on a second generation site that has already been finished by a previous tenant. There is great value to an existing infrastructure – electrical, plumbing, lighting, fixtures, equipment – as long as they fit into the business model and architectural design of the new restaurant.
However, they may not fit, and the restaurant owner may be better off in starting from scratch and building their site to exactly fit their needs. Sometimes renovation costs with older infrastructure, hvac, roof, equipment, restaurant layout, bar, etc. can be greater than expected. At Meliker Realty, we provide guidance to our clients in this decision making process.
Other factors in this decision involve construction and permitting time, the financial capabilities of the owner to either build out or renovate, the site layout and design, and the business plan. Many restaurants fail to get out of the starting gate due to making the wrong decisions in this area…which can lead to rent commencement even as the restaurant is still under construction. This can be a nightmare situation for the restaurant owner and affect the business’s success.
Do the Math!
Simply put – do the math – to guide you along in deciding upon new space or second generation space. Factor in everything because everything is a factor!