October, 2021 F+B Hospitality Brokerage's, Felix Bendersky, was quoted in ZAGAT in their article, "What It's Like Renting A Restaurant In Miami Right Now: Locals, Landlords, Newcomers, And Grease Traps." Miami dining lost hundreds of millions of dollars to the pandemic, but out-of-state cash and a run on space are keeping the market hot.
Excerpts from the article include:
"Felix Bendersky, owner of F&B Hospitality Brokerage, saw landlords looking out of state to pick up the slack from struggling local tenants. “It was like, ‘What do you have to lose?’” he says. “Landlords were lucky if they were getting paid. So you might as well bring in a sexy concept from out of state—New York, Vegas, LA. You have a better shot than going with a local upstart.”"
"With Miami’s rigorous regulations and tight market even before the pandemic, broker Felix Bendersky makes second-generation space a special focus. “Miami is probably the hardest place to open a restaurant because of zoning and codes,” he says. “Ask any operator about the biggest challenge of opening in Miami, and they will tell you, without a doubt: the grease trap.” Getting a properly updated grease trap alone is hazard enough to sink a business. “Permitting was a year out before … and now it’s going to be 18 months to two years. Guys who don’t know any better will start signing leases. They’ll set that money aside for six months of expenses, but then they’re going to find out that their free time is up, and their permits aren’t done yet, and they have to start paying rent. By the time they’re open, they’re done.”"
"“I’ve never seen Miami with no second-generation restaurant inventory,” Bendersky laments. “Every broker, if you go on Facebook chats, is asking for the same thing. ‘Does anybody have a second generation, 1,000 to 1,5000 square feet with a hood, with an updated grease trap?’ That’s like saying, ‘Hey, have you seen my unicorn lately?’”"
"Big developers and landlords still have new prime restaurant spaces to fill. They’re looking for a solid anchor amenity on a new condominium, for example—something that will appeal to all those prospective out-of-state condo buyers. Bendersky works with them too. “They’re looking at anywhere between $300,000 and $500,000 for a ready-to-go restaurant. So they’ll come to me and say, ‘Hey listen, we’re going to have to do something anyway. We’ll give the operator that money, but bring us somebody sexy. Bring us somebody from out of town.’”"
"In every other case, Bendersky insists that building out a new space is a bad idea. He thinks anyone looking to open a new restaurant should wait until the inventory opens up. For those who absolutely cannot wait, and who like a second-generation space but can’t make a deal with the landlord, he has a new piece of advice: Just buy the building."
"“Whatever happens with the restaurant,” Bendersky explains, “whether the restaurant does well, whether it doesn’t do well because of all the competition—they still have that asset that’s really in demand right now. … Between the investment they would have to make with the lease, and with the prices getting as crazy as they are, and landlords taking advantage of the market, it just makes more sense to buy the building. Be your own landlord. That way it decreases your risk if the restaurant were to shut down because of COVID. With a landlord, the first thing they’ll do is evict you because they know what they’re sitting on. Then they’ll raise the price on the next guy.”"
"Your view on restaurant rents in Miami depends on where you sit in the business. Felix Bendersky has a very dim view of the current rent levels, calling them “a bubble that’s about to burst.” He complains that due to pandemic turnover, “landlords got very, very greedy with the restaurant space. Maybe a year ago they were charging $28 a square foot, and all of a sudden you’re at $49 or $50 a square foot.”"
"By contrast, hospitality broker Felix Benderksy tells his restaurateur clients, “Don’t do it right now. Wait. There are all these people who are coming down, who don’t have experience, who are maybe being backed, who just wanted to come down here because this is where they want to be. A lot of those places are going to be back on the market in the next six months. … Let’s say there’s 1 to 2 percent of second-generation [space] available in Miami right now. I think that number will go to 25 percent by winter. That’s what I’m seeing in terms of random people signing leases who have no right signing them and overpaying.”"