Published Expert Article
by Paul Nora
Associate Advisor at Pinnacle Real Estate Advisors

It is common knowledge that this Pandemic has had devastating effects on the Denver Restaurant industry.  Even today, Denver county remains on level orange, meaning that restaurants can only have up to 25 percent capacity for indoor dining and must stop alcohol sales by 10:00 PM.  Despite these ongoing changes, as the vaccine begins wide-spread rollouts, we can look at the “silver linings” the last year brought to the Denver Restaurant Industry as it changes towards a post-pandemic future.

This Pandemic has forced restaurants that have had the will to survive to be creative and innovative in a multitude of ways.   Even before the Covid-era, the Denver restaurant market was highly saturated with competition amongst restaurateurs for well-located sites in addition to massive buildout costs. Denver dining sat atop a bubble.  To make it through the Pandemic, the Denver restaurant industry needed to adapt.  Restaurants that adapted to third party delivery services and take-out business led the charge as restaurateurs needed to provide quality food that created an exceptional to-go experience for the customer.  A more efficient online ordering system, along with the raw quality of the food being provided is how these restaurants were able to stay afloat during these difficult times.

Another notable benefactor to restaurants’ livelihood during this time have been the rise of Ghost Kitchens.  The idea of a professional food preparation and cooking facility set up for delivery-only meals has excelled since the start of the Pandemic.  Additionally, restauranteurs have found creative ways to utilize their patio or outdoor space while respecting Covid-19 protocols.  Many restaurants utilized tents and igloos as the weather got colder and these new, unique experiences ended up attracting customers while giving them the confidence that they are in a safe dining environment.  These creative innovations were necessitated by the Pandemic, but will likely remain for the foreseeable future in the restaurant industry.

Streamlined POS (point of sale) both online & in restaurants are innovations that Kevin Brown, Managing Partner of Via Baci, believes are here to stay.  Peter Newlin, CEO of Birdcall, believes that these changes were inevitably going to happen at some point in the future and the pandemic simply accelerated the process to adapt to the customer of the future.  “To get through this Pandemic, restaurants are going to have to adapt… it is about keeping a positive attitude and making adjustments daily… (a restaurant) cannot force their way through a Pandemic,” stated Newlin.

A heightened sense of community is yet another silver lining that has come out of this Pandemic.  Although the reviews vary, the majority of restaurant owners deemed the PPP loans incredibly helpful to get through the difficult times.  But from a more intimate standpoint, the shared hardships brought on by the pandemic sparked a whole movement of supporting local business, which in turn helped keep many of these neighborhood restaurants open.  These restaurants felt that support and many of them decided to give back as well. Newlin, along with his partners at Birdcall and help from The Tuchman Family Foundation & TTEC Holdings, started Fuel Hope Kitchen.  The mission statement of Fuel Hope Kitchen is “Delivering meals to frontline heroes working at hospitals in remote regions of Colorado – from the Pawnee National Grassland to the Rio Grande National Forest.”  Through this foundation, over 106,000 meals have already been delivered to healthcare workers with a goal of delivering an additional 200,000 more.  In turn, this has put restaurant workers back in uniform, with over 10,000 hours worked to provide these meals to our first responders in the healthcare system.  If you want to learn more about the foundation or donate, please visit fuelhopekitchen.org.

As we look towards the future, there is finally a sense of optimism in the Denver restaurant industry.  It is no secret that consumers are itching to have the restaurant experience again.  We saw that this summer before the second shutdown, as people consistently filled restaurants and bars to the permitted capacity.  As of the past month, an increasing number of restaurant tenants have been touring potential spaces with the anticipation of a “restaurant- rush” coming right as their buildout is complete.  Quite a few of the safety protocols will stick around for the foreseeable future, thorough sanitization of tables and chairs between each use, masks being utilized in the common areas, social distanced seating, and the city allowing makeshift outdoor dining spaces as well.

There is a lot of hope on the horizon for the Denver restaurant industry.  An optimistic outlook, embracing the importance of community, and remaining innovative will be the cornerstones for success in Denver Restaurants as the world shifts into a post-pandemic era.

Featured in CREJ’s February 2021 Retail Properties Quarterly