Sidewalk Wars: The Latest Way Miami’s Restaurants are Adapting to COVID-19
When you hear the term “sidewalk cafe,” normally your first thoughts go to the bistro-lined streets of Paris, where dining al fresco is a year-round part of life. In Miami, especially during the summer, residents tend to seek shelter from the sweltering heat and humidity in the air conditioned sanctuaries of indoor dining establishments. However, like many other aspects of our daily lives, COVID-19 has instigated dramatic changes to our dining routines. With Miami-Dade’s recent shutdown of even limited-capacity indoor dining, restaurants that were already struggling to stay afloat in the pandemic are once again faced with crippling challenges.
Thinking creatively and adapting yet again, many restaurants have improvised within their existing footprints to create dining space outdoors. And — despite the Miami summer heat — people are responding in droves.
Take The Citadel, for instance. The mostly-indoor food hall that has taken Miami’s emerging Little River neighborhood by storm, and its boutique restaurant partners that line the industrial-chic stalls of the first-floor communal dining area, have been struggling amid the shutdowns. Most people go to The Citadel for its shared-dining experience and eclectic sampling of culinary styles all in one location. An appeal that carries far less weight when only takeout is available. Ever the innovators, The Citadel used construction barricades, picnic tables, and brightly-colored umbrellas to create an impromptu outdoor dining area. Patrons can now order, socially-distanced, inside the food hall from their favorite eateries and proceed to the ‘curb to consume their favorite grub.
Breweries are another category within the hospitality community struggling to stay open. Many of them rely on food trucks to serve food to patrons, which did not qualify most of them to stay operational during the first phases of the pandemic, where bars that did not serve food were forced to close completely. In the current phase of regulations, fast-thinking beer-makers have been creating outdoor “Beer Gardens” where customers can enjoy a cold brew in plastic to-go cups. Lincoln’s Beard, in Ludlam, for example, sacrificed its coveted parking lot directly in front of its building to erect a tent and socially-distanced tables.
However, establishments who own the rights to their own parking lots have had an easier time adding outdoor seating areas than others.
Often, it has come down to whether the street on which a restaurant is located is managed by FDOT (Florida Department of Transportation), or managed locally by the County or another municipality. As reported on by the South Florida Business Journal, businesses along Miami’s iconic Calle Ocho, which is an FDOT-managed thoroughfare, have especially struggled to get permitting to expand eating areas to street areas and sidewalks. Demand on city officials to allow restaurants to take over pedestrian and vehicle space for dining has caused the City of Miami to include provisions for restaurants’ outdoor expansions in its most recent Restaurant Recovery Program.
While we are all longing for the days when we can be huddled together around Brickell restaurant booths or jockeying for standing room at a Wynwood bar, those days are likely still in the distant future. Welcome to the “New Normal” for food and beverage spaces, where certain effects from COVID-19 are in motion to continue shaping the way that restaurants approach, buy, and lease commercial space indefinitely.
Here are three ways that we foresee the restaurant sector of the commercial real estate industry will be changed indefinitely:
- Outdoor dining space will come at a premium
Restaurant spaces with outdoor dining options have historically been in high demand, sort of like waterfront houses. However, the price gap between a restaurant space with indoor-only dining compared to those with the option for seating customers alfresco will continue to widen — exponentially. We are already seeing major price spikes for restaurant space available in Miami with access to the outdoors. Outdoor dining was appealing before; now, it is essential.
- Leases will be tougher to sign as potential tenants hedge their bets
Tenants are kicking the can down the road right now, not wanting to commit to new space until the U.S. has a more concrete timeline for the end of the pandemic. Hospitality and entertainment businesses, especially those launching new concepts, seek to tread carefully towards the uncertain future. Landlords wanting to close deals right now should be prepared to be flexible in their terms, and potentially even consider taking on some of the risk with tenants by going in on a percentage-of-sales profit model. While currently uncommon, we expect to see more deals structured this way going forward as the industry continues to recover and evolve.
- Restaurant concepts will partner up to hedge risk and support each other
Take Brad Kilgore’s famed Design District speakeasy, Kaido. During the pandemic, the intimate Japanese spot and self-described “Tokyo-style drinking den” has been empty along with most of Miami’s other nightlife havens. Old Greg’s Pizza was a culinary pop-up that had planned on opening in Miami this March. When the pandemic derailed their plans, Greg Tetzner and Jackie Richie, the duo behind the now-famous pies, began selling their pizzas via Instagram. Thanks to a network of chef friends and influencers, the grub soon became a social media phenomenon, and Kilgore took notice. Becoming an instant fan and business partner, Kilgore offered up the vacant Kaido space to Old Greg’s so the couple could operate at a higher capacity and sell directly to consumers for takeout. Our prediction? Concepts will continue to team up in order to maximize real estate and minimize costs. Pizza by day, speakeasy by night? You bet.
