With DC Restaurant Scene's Continued Growth, Some Brokers Are Becoming Wary
The restaurant scene in DC has been exploding, with new fast-casual places and experiential restaurants taking over traditional restaurant concepts. Brokers are keeping cautious, though, as some economic experts predict a downturn in the market. The biggest players in the industry will come together at Bisnow's DC Retail and Restaurant event on Tuesday.
"In the old days, everybody had a deli in their building, they went down and got a tuna fish sandwich and ate at their desk," Henry says.
The last decade has seen a shift in the way people experience restaurants, Henry says, with more of a focus on the quality of the food and the restaurant experience.
"Dining has turned into an entertainment experience," Henry says. "I think Millennials and Baby Boomers alike are enjoying going out and making an event out of going to eat."
This creates a market for new and exciting concepts, he says, but it leaves behind some older traditional restaurants.
"The old style restaurants are seeing cannibalization from all of the new concepts, and it's competitive," he says. "It's very competitive."
Henry has an optimistic view on where the restaurant industry is going, and thinks this growing demand for dining experiences will keep people coming out to restaurants even if there is a downturn in the market. Some brokers, however, are not so confident.
"It’s a concern," Grant, above, second from left, tells Bisnow. "That’s discretionary spending and it theoretically would be vulnerable if there is a downturn. There are more restaurants now per capita than there ever have been."
When JBG completed its acquisition of JBGR, Grant and the two other JBGR principals spun off to create Willard Retail. The company is still affiliated with JBG, which can invest in any of Willard's project and will bring the new company in on any of its retail or mixed-use developments with an anchor component.
Grant, who will also speak at Tuesday's event, says he had hoped JBG's merger with New York REIT would go through, but he is glad now that it is out of limbo so they can start buying up properties again.
"We're back in business because it sidelined us for a while," Grant tells Bisnow. "JBG had a quiet period, they weren’t able to buy as many assets as they formerly had, now they are going to be back in the acquisition business."
Willard's first project, a JV with Bozzuto, is a $110M mixed-use development in College Park, rendered above. Located just off campus on the 4.5-acre site of Plato's Diner and the Quality Inn, the development will have 300 luxury apartments and 100k SF of ground-floor retail.
Grant said he is looking for a grocery store to anchor the building, since no full-size grocery store exists within walking distance of UMD's campus (students have to rely on CVS and 7-Eleven for staple groceries). He said some grocers have expressed interest, but couldn't say with which ones the company is in talks.