A Growing Market Battles for Pad Sites
On May 13, 2014 At 2:32 pm
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With a market that continued to expand through the recession, fast casual dining restaurants are now battling over limited pad sites. What is a “pad site” you may ask? Pad sites are those outlots that sit in front of shopping centers and grocery stores. The appeal of these sites comes from them being centrally located in highly trafficked parking lots, such as shopping malls, strip malls, and large stores with massive parking lots like Lowes and Home Depot.
While these pad sites are especially appealing to restaurant franchises such as Checkers and Rally’s, more recently non-traditional retailers, including clinics, dentists, and chiropractors are now pursuing these retail sites. Medical facilities are trying to provide more convenient locations for their customers, and what is more convenient than a place situated smack dab in the middle of a busy parking lot?
Due to a peak in interest surrounding purchasing pad sites, prices for these small plots of land have gone way, way up. Small sites in certain areas can be upwards of $1 million just for the property itself. Companies like Checkers and Rally’s prefer sites that are prices closer to $500,000. The high demand but low quantity of these sites in many areas is leading to many battles over prime pad sites, where multiple offers are made and one franchise must be another one out for the space.