Restaurant Deals Spike in Dallas/Fort Worth

DALLAS-Restaurateurs’ interest in Dallas/Fort Worth has risen significantly in the past year, with the trending up coming from high-end, sit-down establishments. The days of Tex Mex and barbecue aren’t over, but they’ve taken a backseat for now to highbrow names from the Northeast, Las Vegas and the West Coast.

Tracey Evers, executive director of the Greater Dallas Restaurant Association, credits today’s buzz and steady stream of openings to Nobu tapping into the market in late 2005 at 400 Crescent Court in Uptown. Since then, there’s been an endless procession of high-quality names staking claims in the metroplex.

“It seems to me that other markets are now taking Dallas seriously as a restaurant market,” Evers tells GlobeSt.com. “We really couldn’t figure out before why the top national brands didn’t want to come here.”

Restaurant brokers Dennis Leibovitz, executive vice president of the Retail Connection, and Darrell Hernandez, executive vice president and partner of United Commercial Realty, say the floodgates have been opened by trophy developments, particularly infill, setting up never-before opportunities for a steady parade of brand-name newcomers and top-level locals. The statistics support the trend, with Dallas/Fort Worth accounting for nearly $12.8 billion of the $547.1 billion per year spent on dining out in the US, according to Fort Worth-based Buxton. Ranked second in the nation, Texas’ dining revenue is expected to hit $32 billion this year, based on the latest stats from the National Restaurant Association.

“Restaurants are attracted to great developments with the right energy and retailers,” Leibovitz points out. Infills like Victory, Uptown and NorthPark have picked up a plethora of highbrow, out-of-state names that are staking just one claim in the region while suburban developments like Arlington Highlands and Alliance Town Center are portals for sit-down locals adding second and third locations.

Likewise, the welcome mat’s out in Fort Worth’s Sundance Square, which has had an array of restaurant changes in the past six months and has just landed Ruth Chris for an open spot at Main and Seventh streets. And, a long-time Dallas mainstay like Truluck’s is venturing into the suburbs for its third location, taking a spot in Southlake Town Square in Tarrant County. And then there is Hoffbrau’s, with key spots in Dallas and Fort Worth, ready to test a mini-version of its steakhouse in Arlington.

“You have more restaurants than you have great space,” Leibovitz says. “To get the best spaces, they are usually paying the best rate too.”

Richard Hollander, president of Buxton’s Customer ID line, estimates that the inquiries for restaurant searches have doubled in the past year, maybe even six months. The noticeable difference from the region’s past to the present is “we are seeing a lot more one-offs that are better quality restaurants,” he says.

Buxton’s research shows there is 21 sf of gross leasable retail space per person in Dallas/Fort Worth versus the national average of 16 sf. It’s not possible to extrapolate just the restaurant space, but it’s recognized that it’s a significant portion of the total.

“I think we’re a long way from saturation,” Hollander adds. “It appears to me that people like variety. With the population growth that we have, I don’t think there is a saturation point in the foreseeable future.”

Dallas/Fort Worth has long been viewed as a test market for the industry. Despite the prominence of the name, they don’t all make it as Smith & Wollensky discovered. Industry insiders say the problem was the location: backfilling a spot along the North Dallas Tollway instead of joining its steakhouse equals in Uptown, the Galleria or Dallas CBD. Yet in days gone by, it was new concepts testing their fare, fast-foods and fast-casual. The times clearly have changed.

“We are seeing good operators and good restaurants reacting to new retail projects,” Hernandez says, citing 15 to 20 new sit-down names and local expansions that are looking for space or about to come on line. “Dallas is going up another level.”

Hernandez credits the changing times to the quality of the mixed-use developments that have taken over the region. “They have to differentiate themselves from all the others in Dallas,” he says. “They want it to be special. At the same time, the restaurateurs are taking one key location and they want to maximize sales and be different.”

Across the board, the pros say the trend will snowball and not wane. “When they choose to come to Texas, they either choose Dallas or Houston,” Evers says. “We’re certainly glad that they’re choosing to come to Dallas.”