Restaurants Are Dominating More Than Just Retail

Restaurants are driving leasing activity in the retail sector, but curated food-and-beverage experiences are becoming a cornerstone in every asset class. Real estate owners are seeing food and beverage as a way to drive value and leasing at a property. Cultivate Hospitality Group launched recently to provide expert guidance and brokerage to owners and developers looking to for unique restaurant and dining experiences. We sat down with Peter Peterson, president and managing director of Cultivate Hospitality Group, to talk about the trends in food-and-beverage and why these operators are becoming integral to creating a unique experience.

GlobeSt.com: What is driving this explosion of restaurant and food-and-beverage leasing?

Peter Peterson: There are a few things that factor into that. As a general trend, younger generations more and more want to spend their disposable income on experiential things. They are not as concerned about buying material things. Typically, with older generations, you buy a home and spend your money on things that you can touch and feel. Younger generations are looking for more experiential products. That is a shift that has played into a lot of this. It is also a maturation and an evolution of America becoming more sophisticated about food. I often make a comparison to wine. It used to be that the wine consumption in this country was very limited. Today, Americans have a sophisticated palate, and that has translated into how we consume. That has really played into the fact that people are looking into more food options and they have a better understanding of quality. I think that is one aspect.

GlobeSt.com: How can curated food and beverage options benefit the value of an asset?

Peterson: As real estate has become more competitive, differentiation has become more important. There is only so much that you can do on the physical element of a building. You can only spend so much on the architecture or the design or the finishes. What really differentiates a property is the experience and really making the property come to life and how people are experiencing the space. Food and beverage is a way of activating the space and giving something experiential. That is a really big point of differentiation.

GlobeSt.com: Have owners and developers caught onto this trend?

Peterson: There is definitely a learning curve. Some developers and owners may have picked up on this trend earlier on. I had the fortune and opportunity to work at Related, which understood this very early on. Just as all trends in real estate, there are going to be leaders and there are going to be people who wait to see how the trends play out. That is what you are seeing now. People are seeing that they need to get ahead of this or their competitors will. This is really happening in every single asset class. Some developers are quicker to catch on, and others are still in the wait and see phase.

GlobeSt.com: What is your advice to owners looking to incorporate food and beverage into an asset?

Peterson: Restaurants and food and beverage are risky and has always been seen as a risky venture. You have to commit that risk, and you need to prepare yourself in every way possible to minimize that risk. That is our main job. We need to be working with the developers so that they are putting their best foot forward, and if they are going to take that risk, they are doing it in the best way possible.