By Corina Vanek | Phoenix Business Journal
The COVID-19 pandemic and resulting closures have had far-reaching effects on restaurant and retail real estate, as some companies have had to vacate locations or landlords have had to decrease rent to fill a space.
For well-capitalized retailers, especially franchises, the pandemic has presented an opportunity to get into locations that previously were too full or too expensive, industry observers say.
“We’re looking to assist the franchise industry and do everything we can to help them prudently grow,” Rocco Fiorentino, a broker at Keyser specializing in franchise real estate, said. “Traditionally it has been a landlord’s market. COVID has diluted the market and for a short period of time it could be a tenant’s market.”
The first thing many brands did during the pandemic was “put on their survival hats,” Fiorentino said, but now that it has gone on longer than expected, companies are taking a look at the real estate market to see if they can find a location they otherwise would not have been able to obtain. If, for example, a competitor goes out of business, that location could more easily be converted to suit a new tenant with a similar business, he said.
Sean Lieb, vice president at SRS Real Estate Partners, works with several franchises in the Valley, including Smoothie King, Cheba Hut and Urban Bricks Pizza, and said some franchises have been able to expand quickly as some landlords have had to lower their rents and backfill spaces that are now empty.
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