The demand for dining out is palpable, as evident from current industry data. According to Open Table reservation statistics, two-thirds of U.S. consumers are dining out at least once a week. A recent report from JLL indicates that for every $100 spent on groceries, consumers are allocating $130 to dining experiences. While restaurants have always been in style, the current consumer behavior underscores an even greater appetite for dining out, and there are no signs this trend is slowing down.
“People are social creatures. They want to get out and engage with other people,” says Christian Irwin, Federal Realty’s Vice President of West Coast Leasing. “At the same time, it’s important to partner with the right restaurateurs that are offering a great product, great service and great experience for customers,” says Irwin. We recently sat down with Irwin to hear more about how the leasing team is working to curate a strong full-service dining mix that continues to drive traffic and boost business for tenants across its centers.
Federal has a long track record of generating strong restaurant sales across its properties. That success is due to a number of factors, including a strong emphasis on placemaking, merchandising strategy, and a deep understanding of its core customer. “At Federal, it’s all about creating the best environment for people to want to visit. We devote a significant amount of time on the merchandising, and F&B is a major component of that,” says Irwin. “The team is always on the hunt for new restaurants that will help drive traffic while also collaborating with existing restaurants to ensure consistent sales performance,” he adds.
Revitalizing the tenant landscape
Three years ago, Federal took a hard look at its restaurant mix at Old Town Los Gatos in California and recognized that its F&B offering needed an overhaul to better fit the area’s changing customer. “There are a lot of great restaurants at Los Gatos, we wanted to partner with a unique restaurant that would be as passionate about the location as we are, while also contributing to an exceptional look and feel to the build-out,” says Irwin.
The leasing team brought in a new marquis tenant in Telefèric Barcelona, a restaurant concept founded by the Padrosa family in Spain. Known for its authentic tapas, paellas, and cocktails, Telefèric Barcelona enhances both the culinary and social ambiance at our Los Gatos location.
“Since opening in 2022, their sales have been off the charts, and more importantly, the energy and excitement they’ve created has led to new leasing opportunities,” says Irwin. Since then, Federal has added Blue Bottle Coffee, Warby Parker, and Arhaus among more to its lineup.
Reaching a new demographic
We’re actively refining our restaurant selections to better resonate with our customer base. Two years ago, after acquiring the Shops at Hilton Village in Arizona, our leasing team analyzed the local restaurant scene. We identified an opportunity to attract Scottsdale’s growing younger demographic and increase evening traffic to the property.
Capitalizing on this insight, Federal has partnered with Aftermath Bar & Kitchen, a local favorite expanding to its second Phoenix-area location. The full-service restaurant, which is gaining a following for its lively atmosphere, modern menu, and craft beer and cocktails, proved a perfect fit for the up-and-coming area. “We’re not waiting for the phone to ring. We’re out there looking for the best match for our property,” says Irwin.
Elevating the benchmark
Santana Row is a destination lifestyle center in San Jose that sets a high bar for both foot traffic and restaurant business with restaurant sales that exceed $1,300 psf. Curated, modern dining options are vital for sustaining the center’s allure. And we take a proactive approach to maintaining that high standard.
Leasing’s top priority for filling space at a premier destination like Santana Row isn’t just in finding valuable tenants; it’s in balancing the mix. This rings true for both new and existing restaurants, which are evaluated and reevaluated in terms of three critical buckets: sales performance, menu diversity, and establishment look and feel. This is just one way in which our leasing experts ensure tenant relevancy across our centers and locations.
Keeping up with changing tastes
In a country where roughly one-third of every food dollar is spent on dining out, it’s important to keep up with where consumers want to spend those dollars. At Federal, such success stories exemplify our leasing team’s ability to keep its finger on the pulse of what’s next and what’s important to consumers. “We truly look at our restaurants as more than tenants but as partners, because they are such an integral part of what we do and the success of our properties,” says Irwin. “We want our restaurants to evolve with us.”
