When restaurant spaces become available at Whitestone REIT (NYSE:
WSR) properties, there’s no shortage of interest.
The priority for Whitestone, though, is to select the right
tenant for the right property. In the case of restaurants, that
means selecting restaurants that offer an exciting menu and dining
experience which complements the preferred dining tastes and
experiences of each property’s neighboring communities.
“Food connects people,” said James Mastandrea, Whitestone’s
chairman and CEO. “Great restaurants make for great local
connections.”
Those connections are important because restaurants make up 18%
of Whitestone’s gross leasable area and pay a 35% premium rental
rate per square foot compared to Whitestone’s overall rental rate
per square foot, resulting in restaurant make up 24% of its average
base rent — more than any other tenant category. Grocers rank No.
2. Both categories are among the biggest drivers of traffic for
retail centers.
While some churn is normal even in the healthiest of centers,
the COVID-19 pandemic led to an increase nationally. Of the
restaurant spaces that opened up in Whitestone’s properties during
the pandemic, many of those spots were quickly backfilled by
restaurateurs who were attracted to the desirable locations and
high traffic count of Whitestone’s centers.
With its focus on leasing heavily to fast-growing,
well-capitalized local and regional restaurants, Whitestone was not
impacted to the degree some other REITs were during the current
pandemic. That’s because those restaurateurs were able to pivot
immediately when dining rooms were closed for weeks — or even
months — in some areas. Tweaks included adding impromptu drive-up
lanes and expanded outdoor dining areas.
“The important thing about restaurants is that you have to make
sure they’re built right initially,” Mastandrea said. “We’re
heavily focused on that because it's very expensive. That way, when
a restaurant goes out, the likelihood of filling it with a new
concept is high. It's less burdensome for the landlord and for the
tenant.”
Restaurateurs who select second-generation spots experience a
number of benefits, including getting prime space in established
centers and being able to save hundreds of thousands of dollars on
buildout costs related to the kitchen and dining area, according to
Modern Restaurant Management, an industry publication.
Some of the hottest restaurant categories right now, Mastandrea
says, include small plates, healthy dishes, Ramen, Korean barbecue,
and Nashville hot chicken. High-end bars with mixologists have
become quite popular, as well.
“I love how our entrepreneurs were able to flex so quickly
during COVID,” Mastandrea said. “The larger restaurant chains were
closed, and the local guys figured out how to be open. All of a
sudden you could buy gallon margaritas. The local guys got ahead of
the game by being able to adjust quickly to adapt and survive. It
strengthened their business models.”
In spots that did turn over, some are already open with new
tenants while others are rapidly approaching their debuts. Here’s a
look at some second-generation restaurants that have been recently
announced at Whitestone’s properties in Arizona and Texas.
Hudson House, Las Colinas
Vandelay Hospitality Group was looking to expand its Hudson
House concept and needed the right spot. The Dallas-based company
found it at Whitestone’s Las Colinas Village.
The restaurant, which boasts that it serves “the world’s coldest
martini,” offers an assortment of “straightforward and timeless
dishes,” such as its trademark avocado dip, cheeseburgers with
special Hudson sauce and chicken parmesan.
Hudson House is taking over a 5,200-square-foot space previously
occupied by another restaurant, which “made it easier because the
space already had a kitchen,” said Vandelay’s Vice President of
Marketing and Communications Lauren Land.
“Hudson House appeals to many audiences and works to provide an
approachable experience where guests can come with their family and
return for a date night or night cap,” Land said. “With that in
mind, we have been looking to bring it to the suburban Las Colinas
neighborhood of Irving for quite some time.”
While a number of restaurateurs pressed the pause button on
growth during the pandemic, Vandelay Chief Operating Officer Jon
Peck said his company did the exact opposite.
“As a real estate-driven hospitality group, we focused our time
in 2020 hiring outstanding talent, which provided us with the
foundation we need to grow Vandelay Hospitality Group strategically
in the years ahead,” he said.
Learn more about Hudson House by visiting
www.hudsonhousehp.com.
Prey, Houston
A prime spot at one of Houston’s busiest intersections — just
steps from the Galleria — was too good for the founders of Prey, a
new restaurant concept, to pass up.
“The area fits perfectly because of everything I want to do,”
co-owner Justin Kent said. “It’s a prestigious part of town. I just
felt BLVD Place would be perfect for this concept.”
With both owners being from Louisiana, Prey features a heavy
assortment of Acadian dishes, including oxtail surf and turf and
stuffed Cajun salmon. The restaurant’s signature dish is the Filet
King: a ribeye or tomahawk covered with scallops, crab and
signature Prey sauce.
Landing in a second-generation spot helped accelerate the
restaurant’s opening considerably, co-owner Ty Charles said.
“It makes things easier, especially the whole process with
permitting and inspections,” she said. “It’s way easier than doing
a whole new buildout. Everything is already ready for you there.
You just have to get everything switched over.”
Outside of the kitchen, the restaurant space has been
dramatically remodeled, offering diners a one-of-a-kind experience
resembling a jungle.
“When people walk in, they're like, ‘Wow! This doesn’t look like
anything we’ve seen before’,” Charles said. “Once they taste the
food, they'll be wowed for sure.”
Learn more about Prey by visiting www.preyhouston.com.
Thompson 105, Scottsdale
Richard Federico, a seasoned, nationally known restaurateur,
swore he was retired, but his persistent friend —Tim Donmoyer, an
area resident who drove by the chosen center every day for years —
had other ideas.
Federico, who previously led the P.F. Chang’s chain, was talked
into helping open Thompson 105 in Scottsdale’s Desert Canyon
shopping center. It’s expected to debut in January.
“I kept saying I really don't want to do a restaurant,” he said
with a laugh. “But my friend was persistent to the point I finally
said I'd go take a look at the spot he found.”
During his time in the restaurant industry, Federico oversaw
more than 600 openings, so he knew firsthand the benefits of
securing a second-generation spot. Still, he plans to invest
heavily to make a great space even better.
“Our goal is to give them a fun and cool place in their
neighborhood,” he said. “We're going to take full advantage of the
location. We’re increasing the bar size…you name it.”
The restaurant, which offers views of nearby Thompson Peak, will
feature a menu that leans heavily on dishes from a wood-fired grill
and rotisserie, such as rotisserie chicken and rotisserie prime
rib, as well as some burgers, pastas and salads.
“The menu will touch everything you'd be looking for in a
polished, casual environment,” Federico said.
As coronavirus restrictions are being reduced or eliminated in
many parts of the country, Federico says it’s an ideal time to open
a new restaurant. “People are genuinely flocking back into
restaurants,” he said. “Volumes have probably never been higher.
Most everyone I talk to is well above their 2019 numbers.”
Learn more about Thompson 105 by visiting
www.thompson105.com.
Gabriella’s Contemporary American Cuisine,
Scottsdale
When chef Anthony and Anna Barr set out to open a neighborhood
restaurant, his search for a site started and ended at Whitestone’s
The Mercado at Scottsdale Ranch.
“Being the neighborhood restaurant is just amazing,” he said.
“We do a lot of great things here. We can pack the restaurant. The
people love the food.”
Dishes on the menu include beef Wellington. But “our restaurant
is not only about the food,” Anthony said. “Named in honor of our
daughter, Gabriella, it's about relationships with the people. The
food is almost secondary. It’s all about creating an extension of
home experience for our guests.”
Selecting a second-generation space helped speed things up
considerably, while still allowing Barr to put his own mark on the
restaurant’s interior.
“When we designed our restaurant, we wanted it to feel like you
were coming into our home,” he said. “An atmosphere that made you
feel welcome from our family to yours.”
Working with the Whitestone team made things easy, start to
finish, according to Barr.
“Whitestone has been great for us,” he said. “Any time I've
needed anything, they’re always there. It's been amazing. I feel
like a real person. I'm a part of the Whitestone family and they
want to see me succeed.”
Learn more about Gabriella’s Contemporary American Cuisine by
visiting www.gabriellasscottsdale.com.
About Whitestone REIT
Whitestone is a community-centered shopping center REIT that
acquires, owns, manages, develops, and redevelops high-quality
neighborhood centers primarily in the largest, fastest-growing and
most affluent markets in the Sunbelt.
Whitestone creates communities that thrive through creating
local connections between consumers in the surrounding communities
and a well-crafted mix of primarily entrepreneurial local, regional
and national tenants that provide daily necessities, needed goods
and services, entertainment, and experiences.
Whitestone (NYSE: WSR) pays monthly dividends to its
shareholders and it has consistently done so for more than 15
years. Whitestone’s strong balanced and managed capital structure
provides stability and flexibility for growth and positions
Whitestone to perform well through economic cycles. For additional
information, please visit www.whitestonereit.com.
Safe harbor statement
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). The Company
intends for all such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained
in Section 27A of the Securities Act and Section 21E of the
Exchange Act, as applicable. Forward-looking statements generally
can be identified by the use of forward-looking terminology such as
"may," "should," "could," "would," "predicts," "potential,"
"continue," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" or similar expressions or their negatives,
as well as statements in future tense. Although the Company
believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, beliefs and
expectations, such forward-looking statements are not predictions
of future events or guarantees of future performance and our actual
results could differ materially from those set forth in the
forward-looking statements. For a description of certain of such
factors, see the section entitled "Risk Factors" in the Company's
Annual Report on Form 10-K for the year ended December 31, 2020,
and the Company's other filings with the Securities and Exchange
Commission. Any forward-looking information presented herein is
made only as of the date of this press release, and the Company
does not undertake any obligation to update or revise any
forward-looking information to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
Investor and media contactRebecca ElliottVice
President, Corporate CommunicationsWhitestone REIT(713)
435-2219ir@whitestonereit.com
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