Original Article Via Phoenix Business Journal/ Steven Totten
Anyone that deals in real estate can tell you restaurants are the tenant du jour.
“Obviously the hottest category in real estate is the food and beverage category,” said Todd Folger, first vice president for CBRE’s (NYSE: CBG) Phoenix office. “We’ve got a lot of expansion, so there’s only so many places you can go.”
The prime areas for restaurants — Scottsdale, uptown Phoenix, Arcadia, the downtowns of Phoenix and Gilbert — have become popular enough to raise the rent beyond a restaurateur’s comfort level and slim profit margins.
Because of that, those in the local restaurant industry have opted for more affordable areas, such as what Little Miss BBQ owner Scott Holmes is doing with his famous barbecue’s second location in Sunnyslope.
“We just decided while the market’s really hot, why don’t we go somewhere that’s central where a lot of people live,” he said.
As of late, restaurateurs have opted for smaller submarkets, as is the case with Queen Creek in the Southeast Valley.
Popular local eateries such as Pita Jungle, Original ChopShop, Oregano’s, Ahipoki Bowl, Barro’s and Someburros
Residential growth, as well as the growing popularity of the Southeast Valley, is part of the reason restaurants have been attracted to Queen Creek.
“It’s certainly driven by residential growth, and it’s partly driven by the SanTan area, the Loop 202 and Gilbert,” said Folger. “You look at what they’re doing in Agritopia— there’s a lot of action in the Southeast Valley.”
That’s what drew Scott Kilpatrick, CEO of Sauce Pizza & Wine, to open a new location in Queen Creek next month at Queen Creek Marketplace.
“Honestly we just see the growth happening down in the Southeast Valley,” he said. “We’ve heard other folks are doing well down there. It’s not a place we’re necessarily covering right now.”
Kilpatrick said the area is seeing a lot of action as well, what with a Sprouts Farmers Market(NASDAQ: SFM), Harkins Theatres and Mountainside Fitness, which bodes well for a restaurant such as Sauce.
“We like the co-tenancy there, we like that there’s a lot going on in that center.”
Queen Creek isn’t home to major business operations such as other areas where there’s been restaurant growth, such as Chandler, where Apple (NASDAQ: AAPL), Boeing (NYSE: BA) and Intel (NASDAQ: INTC) have operations; Gilbert, where GoDaddy (NYSE: GDDY) just announced a $15 million expansion; and downtown Phoenix, which is home to Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM), among others.
