Real Estate

The Call of the Suburbs: Restaurants Set Their Sights on the Cities’ Fringes

What we once thought of as a temporary solution to a stay-at-home world ended up changing how we spend our days. According to EPC Group, 56% of companies worldwide are operating as hybrid or fully remote models, and 82% of employees in the U.S. would like to telecommute at least once a week.

What we didn’t quite anticipate were the changes this employee transformation would have on the suburbs. With more people spending more time at home, the suburbs are expanding, with coffee shops, stores, and restaurants sprouting up to fulfill the need this changing landscape has delivered. People no longer need to pay the high prices associated with city life, and sprawling suburbs suddenly seem much safer than the tight, cramped, congested metropolis.

Vox recently reported on Watertown, Massachusetts, a Boston suburb. Developers are snagging up real estate, and a once closed-down mall is transitioning into the Arsenal Yards, a multi-use space with residences, restaurants, and retail stores.

The number of new households moving to the suburbs grew by 43% in 2020 compared to 2019. The rising population increases the need for the services these once city-dwellers grew accustomed to, like coffee shops, gyms, and restaurants.

While suburbs used to be quiet during the day and busy during the rush hour commute to and from the workplace in the city, those days are quickly changing. This means that businesses once empty during the day now have a regular flow of people to count on.

Restauranteurs are heeding the call and heading to the suburbs to answer this growing demand. Let’s look at the latest suburbanites and if this migration is sustainable.

The Next Frontier for Restaurants—Suburbia

First, I’d like to say that as a one-time suburban dweller on the outskirts of Chicago, I’d be remiss not to mention that the move to suburbia for restauranteurs is not such a new thing. I remember hour-long waiting lists at one of my favorite restaurants. When you forgot to make a reservation and headed down the street to another neighborhood eatery, you would find the same wait or longer.

So, were there just not enough restaurants for the suburbs, or did I simply have good taste and knew where the best food was? Perhaps, many operators simply didn’t know that the new happening place was a 30-minute drive from the bright lights of the big city.

Now, they do.

U.S. Foods brought to light some interesting statistics. The highest density urban zip codes averaged 122 upscale restaurants per square mile in 2015. On the flip side, suburban zip codes came up with only 23 upscale restaurants per square mile. While time has certainly narrowed the gap, it’s clear that the competition pales in comparison. And, operators can still count on reduced leasing rates, at least for now.

Is the Migration to the Suburbs Sustainable?

While many question just how long this pattern will and can last, people are purchasing homes in suburbs, which means the trend is probably a lasting one. In fact, the rising prices for homes in many suburbs far exceed the increasing home prices in major cities.

Let’s look at a few of the latest restaurants calling suburbia home.

The New York Times recently reported on some of the independent restaurants making their way into the outskirts of big cities. Jalea, a Peruvian restaurant known for its unique spices and fresh flavor combinations, opened up in St. Charles, 23 miles away from St. Louis, MO, the city with a flourishing restaurant scene. They found lower rent, less competition, and locals eager to try Peruvian food.

Roots Southern Table recently opened its doors in Farmers Branch, a Dallas suburb. There, acclaimed chef Tiffany Derry serves up jerk lamb chops and duck-fat fried chicken and made Esquire’s list as one of the best new restaurants in America in 2021.

Vice recently reported on several restaurants making their way into the Philadelphia suburbs. Where once stood only chain restaurants like TGI Friday’s and Olive Garden, you now find a vegan bistro, two pho restaurants, a gastropub, two breweries, and a farm-to-table tavern.

The Bay Area suburbs are now home to State Street Market, a recent addition to Los Altos. In this former grocery store turned Spanish-colonial-inspired food hall, you’ll find a dozen eateries, including Bao Bei, an Asian fusion hot spot. Michelin-starred chef Srijith Gopinathan will soon be joining them with the opening of Little Blue Door.

Some of the big names in the restaurant scene are setting their sights on the suburbs. The Cava Group acquired Zoe’s Kitchen in 2018, adding 288 stores to their portfolio, and is the parent company to the Mediterranean chain, Cava. CNBC reported that 80% of their locations are in suburban markets. Shake Shack also recently reported that their suburban units are performing better than those in the city.

Of course, as the call to the suburbs beckons, shopping centers, high-end housing, and rising rents will undoubtedly follow. It’s not a matter of if the move is sustainable but, more likely, how long it will be affordable.

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