The retail landscape in New Jersey is witnessing a shift as food and beverage businesses secure prime spaces. According to JLL, the brokerage firm recently facilitated leases totaling 24,000 square feet for food and beverage concepts across the state, signaling an aggressive expansion trend. This surge comes amid rising construction costs and limited availability, creating a competitive environment where quick-service and casual dining remain in high demand. Despite these challenges, the post-pandemic appetite for convenience and experiential dining is driving opportunities for restaurant operators to thrive.
JLL broker Alana Friedman told GlobeSt.com some operators have even been looking to get creative and repurpose assets formerly operated by a major brand. For example, that's a former Burger King or TGI Fridays store, including them in a mixed-use development with offices or apartments.
"I think restaurant categories [have] one of the highest turnover rates," Friedman explained. "So people are able to quickly capitalize on second-generation restaurant space, which would normally cost them three to four times as much if they were starting from scratch."
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Townes added, "there's also ghost kitchens and some other new concepts in the restaurant space that haven't really seen this category [in the past]."
According to JLL broker David Townes, the northern and central parts of the Garden State are the most appealing areas for F&B tenants.
"I would say those [regions are] always in the strongest demand, just based on popular density and retailers wanting to be surrounded by the most viable customers they can find," he said, adding there are also some appealing places further to the South in New Jersey in Greater Philadelphia such as Cherry Hill.
Right now, F&B is a popular trend. This portion of retail nationally accounted for 21 percent of the asset class's leasing activity from January 2024 to November 2024, according to JLL. In addition, the CRE firm projects that F&B tenants in 2025 will lease more space compared with goods-based businesses. Whether it remains that way after 2025 is unclear, but Friedman noted that trends could become "saturated" in CRE.
In general, across retail in New Jersey, the two brokers said that vacancies are at a "historical low," with shopping centers with grocery anchors seeing "historic levels of demand." That gives both Townes and Friedman confidence in the future, despite the uncertainties that lie ahead in the economy.
"Overall, we're totally optimistic, and we see strong demand, and people are really looking to open businesses," Townes said of retail in the state.
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