Ghost Kitchens Cook Up a New Concept in Restaurant Real Estate

June 30, 2020

Ghost Kitchens

In the years prior to the COVID-19 pandemic, the Phoenix restaurant scene had already been undergoing a shift through trends such as food trucks and localized sales. A more recent trend—so-called ghost kitchens or cloud kitchens that provide licensed, centralized food preparation facilities for multiple brands—began to gain in popularity last year. Online ordering was already the fastest-growing source of restaurant sales, so it was fortuitous for the burgeoning ghost kitchen segment when stay-at-home regulations put a new emphasis on to-go and delivery services.

The ghost kitchens themselves are state of the art, focused on creating specialized, limited menus that keep costs down and travel well in a delivery or pickup format—which also makes life more convenient for services such as Uber Eats, DoorDash, and Grub Hub. Kitchen United Mix brought the concept to Scottsdale in December 2019, and has expanded to 13 different brands, from Baja Fresh Mexican, Boston Market, and White Castle to Piescream desserts. In addition to Arizona, Kitchen United operates locations in Chicago, Pasadena, and Austin, providing a full range of support in infrastructure and equipment, technology and marketing, and even detail items such as cleaning and city permitting.

In addition to making sense from an operational standpoint, ghost kitchens are a logical move from a real estate angle. Restaurateurs get precisely the kind of kitchen that they need, without the top-dollar rent and other capital costs of a full kitchen and restaurant. The cloud kitchen concept also dovetails with the need for creative repurposing of well-located commercial properties, as well. Kitchen United, for example, converted the site of a former Fresh & Easy grocery store. It is quite possible the way forward for many restaurants will include a mix of both strategies: part virtual restaurant format and a limited number of locations for full restaurants.

The Phoenix commercial real estate market is fast-moving and challenging. To put an expert advocate on your side for buying, selling, or leasing restaurant properties or any other commercial properties, contact R.O.I. Properties at 602-319-1326.

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