January 7, 2021

SFBJ – Restaurant owners leave Northeast to do business in South Florida

By Restaurant owners leave Northeast to do business in South Florida

By  – Reporter, South Florida Business Journal

An uptick in migration from the Northeast to South Florida isn't only attracting hedge funds and professional service companies to the region. East Coast hamburger joints and pizzerias are setting up shop here, too.

Tom Prakas, owner of Boca Raton-based restaurant brokerage Prakas & Co., said about 90% of the firm's restaurant transactions over the past three months involved buyers from states including New York, New Jersey and Maryland. The buyers arrived in search of South Florida's warm weather, lower taxes and looser Covid-19 restrictions.

"We're seeing this from all lines of the restaurant business," Prakas said. "Quick service, casual dining, fine dining; all of it."

These deals are not the product of vulture investorscapitalizing on the downturn in the restaurant industry to snag cheap brick-and-mortar spaces, he said. In fact, prices for prime restaurants in areas like Boca Raton and Delray Beach are actually higher in many cases than before the Covid-19 pandemic.

For example, the sale of Blue Moon Fish Co. in Fort Lauderdale to Ark Restaurants closed at a similar price to what the restaurant was listed for prior to the pandemic, he said.

For his business, the rise in restaurant sales is tied almost exclusively from recent moves from the Northeast, Prakas said.

Anthony Monticello of Where Hospitality is one of the restaurateurs following the trend. All four of his Manhattan restaurants are currently closed, but he said he plans to open his Vote for Pedro taco shop concept within the Delray Beach Market food hall later this year. He added that he is in negotiations with landlords elsewhere in Palm Beach County, and will likely have a lease signed for his first stand-alone eatery in South Florida by March or April.

“[Florida] is the place to do business right now,” Monticello said. "It's at least a lot easier to do business down here than in New York City."

He said aside from the pandemic, New York's strict permitting laws and high prices for those permits are driving him away. He said he anticipates there will be fewer hoops to jump through as a restaurant or bar operator while in Florida.

The high number of other New Yorkers moving to the county means there should be enough demand to support a new business like his, Monticello said. According to Corcoran Group, there was a 21% increase in the number of new home sales in the town of Palm Beach in the second quarter 2020 compared to the same period in 2019.

Chas Prakas, a sales associate at Prakas and Co., said there hasn't only been an influx in traditional food and beverage operators, but those interested in opening ghost kitchens, too. In the past two months alone, he said five groups have inquired about purchasing kitchens away from prime retail strips to open ghost kitchens, a model in which customers order their food exclusively for delivery through third-party applications like Uber Eats.

"These people really just want a kitchen to cook out of," Prakas said.

While the vast majority of his recent deals include buyers from the northern East Coast, Tom Prakas said there has also been some notable interest from the Chicago area in recent months. However, potential investors from West Coast states such as California have been few and far between for his business, he said.

"We're not getting the move from California, and I think those operators are mostly going to places like Texas and Arizona," he said.

View Source: https://www.bizjournals.com/southflorida/news/2021/01/07/northeastern-restaurateurs-buy-florida-concepts.html