Local entrepreneurs lead a wave of new dining options.
Erin Quinn of the Tennessean talks about the restaurant growth in Nashville. "Even as national chain restaurants have pulled back on expanding in Middle Tennessee and elsewhere, Nashville’s food-minded entrepreneurs have gone rogue in a big way.
Within the past six months, close to 40 new restaurants have opened within a three-mile radius of downtown. Eighty percent of those are owned locally, by impresarios jazzed by the new convention center who are defying the economy, once-headstrong landlords and the traditional meat-and-three."
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“I think the last time we saw a number like this was 15 years ago,” said Rick Balsam, owner of Tin Angel on West End Avenue. “There’s a lot of pent-up desire out there right now. People have waited and waited and waited, and now real estate values have gone down and rents are softening. People are making deals again.”
Some are new concepts, like The Catbird Seat, which encourages banter with the chefs from 30 seats around an intimate, U-shaped kitchen.
Others are local businesses setting up a second location, like Cori’s DogHouse, which opened in Mt. Juliet two years ago and just moved into Midtown.
The tastes range from fondue to sushi, barbecue to vegetarian sausages, flatbread sandwiches to West African cuisine.
The big areas: Midtown, the Gulch, East Nashville, Germantown, downtown and Sylvan Park.
“A lot of that growth is because of the convention center,” said Greg Adkins, CEO of the Nashville-based Tennessee Hospitality Association. “You’re seeing a lot of that growth downtown and within a couple miles of downtown. Entrepreneurs want to get in now to reap the benefits of the economic growth. You want to get in early, not at the crest of the wave.”
According to Adkins, none of the 200 Nashville restaurants that the Tennessee Hospitality Association represents has closed in the past six months.
Of that number, 50 are locally owned.
Deals in rents
In January, Kazu “Kaz” Hishida will open Myridia, an Asian-Latin-European fusion restaurant, in the Fifth and Main condo/retail/restaurants building in East Nashville, where he lives. Next door is the newly opened Germantown Cafe East, also locally owned.
Hishida chose East Nashville after looking at properties in the Gulch and near Midtown.
“The problem was that you had a lot of these groups based in Chicago and Atlanta and L.A., and they were trying to fight the battle of the White House,” Hishida said. Now, they’re coming to the realization that they need to lower their prices. They’ve certainly become much more approachable.”
Jimbo Cook, a Nashville restaurant investor/broker, said rents are generally about 20 percent lower than a couple of years ago, but he has seen deals made for as much as 40 percent lower than they once were.
Generally, restaurant owners say, a lease in Green Hills or near Vanderbilt runs about $28 or more per square foot.
Rental space in the Gulch costs about $23 to $25 a square foot; Midtown/West End Avenue, $28 a square foot; Germantown and East Nashville, $12 to $15; 12South and Sylvan Park, $20.
Downtown fluctuates the most, depending on the location.
Robert Derrington, a Nashville restaurant analyst with Morgan Keegan & Co., says investors will take a chance on a second location if the first sees success.
“If Germantown Cafe, for example, opens another location, and it can see 80 (percent) to 90 percent as much success as the original location, the investor may get a very good return, as opposed to an investor leaving his money in the bank,” Derrington said.
“The restaurant industry is typically developed by headstrong, confident businessmen who are sometimes fool-hearted and other times more cautious,” he said. “Across the industry, in the last five years, the principal growth has been in fast-casual brands like Chipotle or Panera bread. They take a little less time to build and offer a quick return on their investment.”
They also offer cheaper food.
“If you think about the economic backdrop, unemployment in our region is probably a little better than a year ago, but not nearly as good as it was,” Derrington said. “When consumers are cutting back, they’ll cut out restaurants, or trade down and go somewhere like a Panera.”
Finding right spot
Sean Sullivan hopes Derrington knows what he’s talking about in terms of what people want.
Sullivan just opened a second location of his popular Mt. Juliet hot dog joint, Cori’s DogHouse, on 29th Avenue North in Midtown. He shopped for spots in Elliston Place, downtown and Cool Springs, but ultimately went for better visibility to draw Vanderbilt traffic.
When he saw that U.S. Border Cantina was closing after nine years, he jumped on the site within a week of its being on the market.
“I wasn’t necessarily looking at the economy,” said Sullivan, who opened last month. “I’m providing a really, really, really good product for a reasonable price. On West End, I’m probably one of the cheapest.”
Just a quarter-mile away from Nashville’s traditional West End restaurant row, Midtown has seen a sea change, with new places including Chuy’s Tex-Mex moving in on a block that includes Whiskey Kitchen spinoff The Tavern, Gigi’s Cupcakes, Noshville Delicatessen, Broadway Brewhouse and Midtown Cafe.
“The trend is that there is no trend,” Balsam said. “There are so many different types of restaurants opening up. There are places, I think in East Nashville and 12South especially, that have come to expect these small, very localized places. It’s those type of restaurants that really create neighborhoods.”