As noted early this year, 2012 was a great year for Englewood Construction as we saw our commercial general contracting activity increase immensely. Going into 2013, we thought momentum in the commercial construction industry would carry through.

We weren’t wrong. The first few months of this year have proven to be extremely active in new commercial construction projects. Thanks to the booming 2013 restaurant development pipeline, we have a full plate right now.

Englewood’s new restaurant development opportunities are up 55-60 percent this year and it has become a major part of our portfolio. It’s safe to say we have not seen this level of new restaurant construction projects in the commercial general contracting industry since 2007 or 2008.

New restaurant construction activity is up across all product types, from national chains and fast food giants to high-end restaurants and new fast casual concepts, restaurateurs are expanding at a rapid pace.

There are several reasons for this:

On-line shopping. Unlike traditional retailers, restaurants are not feeling the pressure of on-line competition. While many of today’s consumers make on-line purchases, restaurants still offer an experience and convenience that can’t be duplicated.

Changing demographics. The other factor driving restaurant construction is new demographic patterns. In the last commercial construction boom, new restaurants, especially fast casual concepts, opened in suburban malls and outer-ring locations as a cost effective way to build brand awareness and gain a presence in the market.

With today’s new restaurant construction wave the strategy has changed. Instead of chasing price, restaurants are chasing traffic. Urban locations with a high population density are the main target. Restaurant construction costs are sometimes double or triple what a suburban location would be, but owners are finding the density is bringing a return on investment.

Want proof of this trend? Olive Garden is building its first location in Chicago.
In the past, its owners wouldn’t have wanted to pay high restaurant development costs to compete with the neighborhood Italian restaurants that seem ubiquitous in a city like Chicago. But as the trend is paying off for other national chains, Olive Garden is testing the waters too.

We have been fortunate to complete a number of national restaurant construction projects, especially with the aforementioned fast casual concepts, like Englewood’s recent build-outs include work for Roka Akor, Noodles & Company and Pei Wei, all in urban locations.

We’ve also initiated a slew of high-end restaurants in Chicago, the most recent being a Season’s 52 for Darden at The Shops at North Bridge on Michigan Avenue. We have some other big Chicago restaurant construction projects coming up, including a new location for a homegrown Chicago institution and the first location for a high-end steak house based out of Canada.

The urban infill market can be very lucrative, but restaurant owners also should be aware its pitfalls. In Chicago for example, many restaurants are having trouble finding space that can support their needs. Most of the prime commercial locations are set up for retail, not restaurants. This can require the assistance of a successful or experienced restaurant general contractor.

Typical restaurant conversion projects require:

• black iron duct installation to handle kitchen exhaust
• a larger gas service to accommodate a cook line
• more potent electrical equipment to accommodate for power
• HVAC has to be properly engineered as heat created from the kitchen can stifle the rest of the dining space if not properly regulated.

Combine this list with doing work in a high-density area, which can be quite tricky logistically, and it’s not always an easy task. Yet the best commercial general contractors with a lot of urban restaurant construction experience and a great understanding of commercial construction timetables and a restaurant construction budget will be able to make this transition a reality.

We’ll have some more news about the restaurant construction industry to announce soon, but for right now, we’ve got a lot to chew on.

Chuck Taylor
Director of Operations
Tel: 847-233-9200 x712

Questions? Comments?
You can reach me at chuck.taylor@englewoodconstruction.com
www.EnglewoodConstruction.com