By Justin Yelda, Associate at Locations Commercial Real Estate Services
Often in commercial real estate, we see trends quickly become a turning point in the game. According to CNBC, food trucks are really making their mark in the retail industry, with food truck rallies even setting up in retail parking lots. The food truck industry is growing rapidly; we should expect to see them more and more. To me, food trucks are exciting; they tend to be located in easily accessible areas and offer a wide range of options. It's always fun to see food trucks set up at carnivals and fairs, but now they're popping up everywhere.
Mobile cuisines have been around in the U.S. dating back to the late 1600s, according to Richard Myrick, founder of Mobile Cuisine Magazine. From street vendors with push carts, to dining cars in trains, to the chuck wagons of the old west, to horse-drawn diners - the concept of mobile dining has endured and evolved. In the 1900s, food trucks were used to feed overseas troops; they were referred to as the US Army mobile canteens or “field kitchens.”
Food on wheels continued to carve out a small niche in our culture for decades - then the wheels started to roll faster. In 2011, the Zagat guide added reviews for food trucks. In June 2011, we saw the first limited liquor license issued to Pera Food Truck in New York. By 2013, ABC News reported "food trucks are the fastest growing segment in the dining industry." Finally, in June 2014, The National Food Truck Association was created, making it their very first national organization. With a seemingly endless variety of foods and locations, food trucks have become an important - and growing - segment of the restaurant industry, nationwide. They are now part of our everyday culture. Washington D.C. is not only home to The White House, but also to D.C. Empanadas, which President Obama tweeted is his favorite in food truck in town.
The popularity of food trucks can impact landlords for better or worse. Landlords may fear that smaller food tenants might convert to food trucks due to low startup cost, low overhead, and the ability to relocate the truck for any reason necessary. On the other hand, landlords can benefit from this by being able to provide more space for a tenant that might need to expand, or maybe even a new tenant to the center.
Food trucks are becoming a staple in the retail landscape at events, downtown areas, office districts and even shopping malls. The mobile business concept is expanding into different niches and is being used by make-up artists, animal groomers, boutiques and many more. This model can be very effective for a business owner who is struggling with high overhead costs, but otherwise is seeing good numbers in their business. I’m looking forward to seeing what’s next for this fast moving segment of retail!