Steakhouse brands, traditionally one of the pricier food dining options, continue to increase their national footprint despite the country’s growing worries about the economy and inflation. Steakhouse restaurants primarily seek space in touristy spots in downtown urban street-front sites near offices and luxury apartments, or upscale suburban markets in or near heavy foot-traffic destinations. However, there are also brands opening in smaller, less-populated markets to satisfy that area’s need for fine-dining establishments. Look for many of these steakhouse chains to pivot with new concepts, such as fast-casual or drive-thru versions of their brands, in order to adapt to various real estate options and customer preferences. Be on the lookout for Texas Roadhouse, Fogo de Chão, Outback Steakhouse, Fleming’s Prime Steakhouse and Wine Bar, Tony Roma’s, Ruth’s Chris Steak House and Gibsons Bar & Steakhouse to all open new units in a variety of markets.
Whether elegantly upscale or unpretentiously rustic, these steakhouse brands appeal to customers who gravitate to the tried-and-true, old-school, meat-and-potatoes concept of dining. These steakhouses appeal to baby boomers and high-earning millennials alike. Frequently considered “special occasion” dining establishments, steakhouses are especially benefiting from the nation’s return to large festive gatherings, such as office holiday parties, wedding receptions, birthdays and engagement parties.
Unlike many other steakhouse brands that position their real estate in higher end urban spots, Texas Roadhouse seeks space in less-populated, smaller towns and rural locations without a large number of similar restaurants. The chain expects to open approximately 20 to 25 new units per year over the next 10 years. Expect developing Southern markets, especially in Texas, Florida, Alabama and Louisiana, to potentially see growth. The brand prefers space in the 7,500-s.f. range in a freestanding building, but Texas Roadhouse will also consider end cap or inline space in a shopping center or an enclosed mall. Sites should be on a major highway or thoroughfare, ideally near a hotel/motel, or a high-traffic errand store such as Walmart, ALDI or Harbor Freight Tools. The company hired a new CEO/president, who took the helm in early 2021 and will concentrate on real estate growth. Texas Roadhouse is considering growth via franchising, which currently makes up less than 10% of its total units. Texas Roadhouse is also expanding its other quick-service retail concepts: Bubba’s 33, a pizza/burgers sports bar, which should see approximately five to 10 new units per year over the next 10 years, as well as Jaggers, a high-quality burger/chicken sandwich/salad drive-thru concept, with four units in Indiana and Kentucky, that should see growth of about five new units per year over the next three years. Texas Roadhouse is famous for its family-friendly, laid-back setting, as well as its hand-cut steaks, ribs and made-from-scratch sides.
Fogo de Chão expects to open approximately 10 new units per year over the next five years. The brand will continue to expand in metros in states where it already has a presence, including Texas, Florida, Colorado, New York and most recently, New Mexico, as well as thriving regions in New Jersey, while eyeing possible growth into Raleigh-Durham, N.C., St. Louis, Sacramento and Santa Clara, Calif. Fogo de Chão looks for 8,500- to 10,000-s.f. inline locations, as well as freestanding buildings. The chain will target premier, high-end destination sites on either urban retail shopping streets, lifestyle centers or mixed-use spaces near offices, luxury hotels with meeting spaces, and Class A apartments and condos. Sites can be in both high-density urban metros, as well as less dense suburban spaces with a high average household income. Preferred co-tenants include other popular special event-themed dining brands, such as Pinstripes and The Cheesecake Factory. A unit is expected to open by late 2021/early 2022 in The Plaza Coral Gables mixed-use center in Coral Gables, Fla., and will feature the brand’s latest restaurant design concept that will contain an attached cigar bar lounge area, as well as a standalone butcher shop called The Butchery, where customers can purchase freshly carved meat to grill at home, as well as wine and cheese. Fogo de Chão is known for its hand-carved, fire-roasted meats in a Brazilian-themed setting.
Bloomin’ Brands, which manages two popular national steakhouse brands — Outback Steakhouse and Fleming’s Prime Steakhouse and Wine Bar — is cautiously optimistic about growth. Based on its same store sales this year compared to last year, Fleming’s has done especially well, with same store sales up 183%. Fleming’s will focus on opening new units in Florida and California at a rate of about five to 10 new units per year over the next three years. Look for potential growth in markets such as Santa Barbara and Sacramento, Calif., and Boca Raton and Fort Lauderdale, Fla. Fleming’s looks for space in the 5,000- to 7,000-s.f. range, either as a standalone pad or an end cap unit, in both metros and suburbs in or near office parks, upscale hotels and high-end outdoor shopping centers. Metro spaces can be ground-floor mixed-use locations in a tourist destination with office foot traffic. Preferred co-tenants include similar fine-dining establishments, such as P.F. Chang’s China Bistro. Fleming’s is a five-star restaurant with a contemporary, inviting approach to the fine-dining experience.
Outback Steakhouse has a similar expansion plan, opening approximately 10 new units per year over the next three years in growing markets. Potential growth areas include Lehi, Utah, North Liberty, Iowa, and Avondale, Ariz. Square footage requirements are in the 6,000-s.f. range, and the brand seeks space in standalone pads or end caps of both neighborhood power centers and strip malls, in mid- to high income suburban neighborhoods within tertiary and secondary markets. Outback Steakhouse has been testing a standalone drive-thru, sandwich-oriented version of its brand with its Aussie Grill offshoot, which is currently only in Florida, but expected to expand into metros such as San Diego, Salt Lake City, Denver and Las Vegas by 2024. Outback Steakhouse is famous for its grilled steaks in a laid-back, Aussie-inspired atmosphere.
Tony Roma’s expects to open between five and 10 new units per year over the next eight to 10 years. The brand was acquired by investment firm Equity Investors of New England Inc. over the summer, and a new COO was named who will be dedicated to furthering the brand’s franchise growth. Look for targeted areas to include large metropolitan markets such as Houston and Atlanta, as well as medium to smaller suburban markets in the South, with a population of at least 120,000. Territories being eyed include Hot Springs, Ark., and Sebring, Fla. Tony Roma’s will also consider territories in states where it already has a presence, especially in high foot traffic tourist areas, such as Asheville, N.C. The square footage requirement is in the 5,000-s.f. range, which can allow the chain to not only be in a freestanding space, but also an inline or end cap site in a strip mall or a power center. Sites should have ample parking and great visibility, and the demographics should include an above average affluent family-friendly segment of the population, especially millennials with advanced college degrees. Preferred co-tenants include other casual dining restaurant brands, such as Applebee’s and On the Border Mexican Grill & Cantina, as well as entertainment venues, such as movie theaters. Tony Roma’s is known for its BBQ ribs and steaks in a relaxed, approachable dining environment, and has recently tested out smaller, mix-and-match items on its menu, called Bones & Bites.
Ruth’s Chris Steak House is taking a more modest approach to expansion, anticipating opening about five to 10 new restaurants per year over the next two years. Growth will be centered not just on the East Coast, with Long Island, N.Y., and suburban regions of New Jersey seeing new restaurants, but also Texas, Florida and even Iowa, a state that will get its first Ruth’s Chris unit by late 2022/2023. Ruth’s Chris ideally seeks standalone, end cap or inline space, between 8,000 and 18,000 s.f., near tourist destinations and business parks in metro neighborhoods, including downtown street-front space near high-end apartments, as well as upscale suburban malls, with a street-facing entrance. The steakhouse also seeks ground-floor spots in new luxury residential and office mixed-use developments that provide ample foot traffic. Ideal space should be near office parks, as well as other popular entertainment destinations, such as performance venues. Preferred co-tenants include other high-end brands, such as an Apple Store. The upscale Ruth’s Chris Steakhouse is renowned for its USDA Prime steaks that are prepared in an infrared broiler for consistent seared perfection. Restaurants are frequently multi-leveled and feature outdoor patio dining when available.
Gibsons Bar & Steakhouse, a popular high-end restaurant chain in Chicago, announced earlier this year of its intent to expand its steakhouse brand outside of its home state of Illinois. Growth is expected to be at approximately five new units per year for the next year or two. Areas targeted for expansion include Florida, Texas, Washington, D.C., and Arizona, all regions with markets experiencing high-income residential growth. A new COO was hired in April to help navigate this national expansion.
Ideal space is in the 10,000- to 12,000-s.f. range, in tourist-heavy metro neighborhoods, including the ground floor of mixed-use office or residential space with high lunchtime traffic and a thriving evening foot traffic scene. Sites can also be in a standalone pad in a suburban setting near a business park, a luxury outdoor mall or a highend hotel. Gibsons has expanded into new partnerships and concepts over the years, creating new brands such as Hugo’s Frog Bar & Fish House and Quartino Ristorante. Its steakhouse is renowned for its Prime Angus Beef and its extensive wine list.
