Smart Restaurant Real Estate: Horton’s Guide to Leasing, Buying, and Building
- mhortonrealestate
- May 3
- 3 min read
Smart Restaurant Real Estate: Horton’s Guide to Leasing, Buying, and Building
At Horton Investor Solutions, we know that opening a restaurant isn't just about great food—it's about smart strategy. One of the biggest decisions you'll face is whether to lease, buy, or build your restaurant space. Each option carries unique costs, risks, and opportunities, especially in the vibrant (and competitive) South Florida market.
With over 30 years of experience in commercial real estate, we’re here to break down the choices—so you can focus on what you do best: running a standout restaurant.
Option 1: Lease a Second-Generation Restaurant Space
The Fastest Route to Market
Leasing a second-generation restaurant—where key infrastructure like the kitchen and grease trap are already in place—means a fast, affordable launch. In Fort Lauderdale, typical rents run $60–$85/SF NNN, with an additional $10–$15/SF in CAM fees. A 3,000 SF space comes in at roughly $217,000 per year in occupancy costs.
Why It Works:
Low upfront investment (about 8–12 months’ rent + deposit)
3–6 months to open doors
Ideal for testing concepts or launching quickly
What to Watch:
Rent escalations and renewal risk
Limited control over building layout
No real estate equity or long-term wealth building
Best for: First-time operators or concepts needing fast market entry with minimal risk.
Option 2: Buy and Renovate an Existing Restaurant
Balance Sheet Growth with Speed
Buying an existing restaurant offers a compelling mix of control and equity-building. In Miami, restaurant sales hover around $1,020/SF (including FF&E and goodwill), while broader retail/restaurant buildings average $330/SF. Renovation costs can range from $100–$250/SF, depending on scope.
Why It Works:
Equity and real estate appreciation
Full depreciation on property and FF&E
More control over branding and design
What to Watch:
Higher upfront capital (25–30% down + renovation)
Legacy building issues (HVAC, plumbing surprises)
Some design constraints
Best for: Multi-unit operators ready to invest in both speed and long-term value.
Option 3: Buy Land and Build from the Ground Up
Maximum Control, Maximum Reward
For brands with a clear long-term vision and the capital to back it, building a restaurant from scratch offers unmatched customization. In Broward and Miami, commercial land runs $400K–$1M per acre, and construction averages around $450/SF in 2025.
Why It Works:
Full design control (drive-thrus, patios, EV stalls—you name it)
New infrastructure reduces early repair costs
Higher resale value and sale-leaseback potential
What to Watch:
Largest capital and time investment
Entitlement and zoning challenges
12–24 months before generating revenue
Best for: Established brands, franchises, or investors with a long-term growth strategy.
Quick-Reference Decision Matrix
Strategy | Upfront Cost (Example: 3,000 SF) | Timeline to Open | Control | Risk | Long-Term Upside |
Lease 2nd-gen | ~$225K (8–12 mo. rent + TI) | 3–6 months | Low | Lease risk | Low |
Buy & renovate | ~$1.3M–$4M + $100–$250/SF renovation | 6–12 months | Medium | Cap-ex surprises | Medium-High |
Buy land & build | ~$400K–$1M/acre + ~$450/SF build costs | 12–24 months | Full | Development risk | Highest |
How to Choose the Best Path
Horton Investor Solutions recommends evaluating these core factors before deciding:
Capital Availability:
Under $250K? Leasing likely best.
$500K–$1M? Buying & renovating offers balance.
$1.5M+? Consider land + build.
Timeline:
Need to open fast? Leasing wins.
Willing to wait 6–12 months? Buy & renovate.
Planning long-term? Build to suit.
Concept Needs:
Need features like a drive-thru or rooftop bar? You may need to own.
Exit Strategy:
Want long-term wealth? Owning the real estate is key.
Market Trends:
With 2025 interest rates hovering near 7.4% and cap rates still sub-6%, ground-up builds can deliver strong returns despite longer timelines.
Why Horton Investor Solutions?
We don’t just broker deals—we build strategies. Horton Investor Solutions offers comprehensive restaurant brokerage services—from site selection and financial modeling to legal coordination and financing. With decades of experience in South Florida’s real estate market, we tailor every deal to align with your brand’s growth plan and financial goals.
Considering your next restaurant move? Let’s map out the smartest path together. Contact Horton Investor Solutions today for a free consultation—and turn your restaurant vision into reality.
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