Posted on July 9, 2019 · Posted in Industrial / Flex, Investments, Retail

Startups are trying out a new model for restaurants in the age of food delivery: shared kitchens in warehouse spaces with limited storefronts.

The move could solve a quandary that has long plagued the restaurant industry: profit margins for delivery are thin, and restaurant space comes at a premium. But scrapping space for dine-in eaters and instead focusing on delivery only would allow restaurants to save on rent and meet growing delivery app demand.

Some investors are already making bets on industrial spaces that will likely become desirable when more restaurants make the switch to delivery-only. CloudKitchens, a Los Angeles-based startup backed by Uber founder Travis Kalanick, acquired at least 10 properties in several major U.S. cities since early 2017. The venture received financing from Goldman Sachs, according to property records, the Wall Street Journal reported.

And as more consumers order groceries online, cold-storage space is becoming more desirable. CBRE estimates that in the next five years, the U.S. will need an additional 70 to 100 million square feet of refrigerator space. BentallGreenOak, a real estate investment advisor, already has several cold-storage facilities and plans to develop an additional $50 million refrigerated warehouse in Savannah, Georgia with Bridge Development Partners LLC.

 

Source: The Real Deal

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