A wave of restaurants have shut down during one of the most challenging years for South Florida’s food and beverage businesses.
Hundreds of restaurants across Miami-Dade, Broward and Palm Beach counties have closed or will close soon after experiencing “the worst summer on record,” according to restaurant broker Felix Bendersky. He’s “constantly” getting calls from restaurateurs asking how much their place is worth and if he can get them out of their lease.
It’s affecting mom-and-pop operators and big chains, including the now-shuttered Mr. Mandolin in Miami’s MiMo District and Yard House in Miami Beach. I just found out that my favorite Thai spot, Lotus Garden in Coral Gables, is closing its doors permanently today.
A surge in the number of restaurants with similar concepts increased competition, hurting operators.
“Ten years ago, if a pasta restaurant was working well in a neighborhood, then you wouldn’t see other pasta restaurants open near it,” says developer Alex Karakhanian. “Now, if people see a concept working well, they believe they can open a similar restaurant in the same neighborhood and that it will work.”
The latest wave of closures comes after a slower-than-usual summer.
Despite the “restaurant armageddon,” these spaces are quickly being filled by prospective operators willing to pay six- and seven-figure sums — on top of their monthly rent. The demand is still outweighing the inventory.
“There are a lot of people looking for second generation restaurants,” says commercial broker Fabio Faerman.
In some cases, the exiting restaurant operator actually makes money when they sell their lease to a new operator by demanding key money. Depending on the size of the space, it could be between six and seven figures. Landlords are now getting in on that.
“That’s on top of charging the new tenant market price for rent,” Bendersky says. “Landlords are tired of seeing these restaurant operators sell their businesses and leases without getting anything out of it.”
What we’re thinking about: Has one of your favorite spots recently closed? Which one? Send me a note at kk@therealdeal.com.
CLOSING TIME
Residential: Ideavillage CEO Anand Khubani paid $100 million for the properties at 18, 22 and 24 La Gorce Circle in Miami Beach. The trust of the late Dr. M. Lee Pearce, a medical doctor and an activist investor, sold the waterfront properties.
Commercial: Randal Perkins sold the Ray Hotel Delray Beach, a Hilton property, to a joint venture between Tmgoc Ventures and Certares Management for $57.7 million. The 141-key hotel at 233 Northeast Second Avenue sold for about $409,000 per room. The buyers assumed the property’s loan from lender AMF Levered II.
NEW TO THE MARKET
The waterfront spec home at 1 Harborage Isle Drive in Fort Lauderdale hit the market for $36 million with Miles Goldstein Real Estate broker Alexander Goldstein. The 11,678-square-foot, five-bedroom estate has 10 bathrooms, a 10-car garage, an 85-foot pool, 115 feet of water frontage and a safe room. It was built this year, and the home sits on a half-acre lot. Property records show a company managed by Arvinder Bajaj and Milic Novovic owns the home.
1 Harborage Isle Drive in Fort Lauderdale (Luxe Hunters)
A thing we’ve learned
A sheriff in Florida warned residents who ignored evacuation orders to “take a black Magic Marker, write your name, your Social Security number, everything on your arm” so officials are able to identify people if they don’t survive.
Elsewhere in Florida
More than 50 people were killed across the Southeast as a result of Hurricane Helene, which made landfall in Florida’s Big Bend late Thursday. More than 4 million people lost power in Florida, Georgia and South Carolina, Tennessee and Virginia. It reached a Category 4 storm and was later downgraded to a tropical storm.
The U.S. Coast Guard saved a man and his very cute dog from their sailboat that was taking on water off the coast of Sanibel Island, before Helene made landfall, NPR reports. Here’s a video of them being airlifted to safety.
Developer Bill Fuller and two partners will get a $12.5 million settlement from the city of Miami stemming from an allegedly politically motivated code enforcement crackdown against their Little Havana venues. The city commission approved the taxpayer-funded settlement at its meeting last week, TRD reports.
The post The Weekly Dirt: “Worst summer on record” for South Florida restaurants appeared first on The Real Deal.
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