Renae Montgomery's first business venture is a smallish breakfast and lunch eatery that opens today in the Town and Country Plaza at Vassar Street and Kietzke Lane.
Montgomery joins a host of other entrepreneurs who are capitalizing on low rents and an abundance of used restaurant equipment to open new eateries in the Truckee Meadows.
Commercial real estate brokers say vacant restaurant spaces are beginning to fill.
Montgomery's venture, The Breakfast and Lunch Nook, a 1,500-square-foot restaurant at 1555 Vassar St., opens where a former business in the location, Pita Hut, shut down in June after just a four-month run. The restaurant serves American-style breakfast and lunch items from 6 a.m. to 2 p.m. Monday through Saturday and can hold 34 patrons.
Counselors from the northern Nevada chapter of SCORE helped Montgomery avoid pitfalls that might hamper her success by establishing relationships with vendors, setting menu items and providing restaurant know-how.
Montgomery opened the restaurant using personal funding. She will employ three people: two cooks and one waitress. The interior of the building has been painted, and new signage was installed, but other aspects of remodeling, such as raising the counter height and installing fixed barstools, had to be put off for a while. "We just need to get the doors open," she says.
The regional economy is still standing, albeit on wobbly legs, and Montgomery and others decided the time was right to open a new restaurant.
"I always wanted to do this, and it became available," she says. "We are going to do well here."
Though retail leasing has been stagnant for several quarters, some area real estate brokers have been successful leasing vacant restaurant space. Ken Mattison, vice president of the retail division of Grubb and Ellis, has landed several new tenants in the past few months.
*Cheeseburger International Inc. of Portola, Calif., will open a Cheeseburger Island Style at the former TGI Friday's location at South Virginia Street and Neil Road. The company, which operates restaurant locations in the Hawaiian Islands, Key West, Fla. and Las Vegas, will renovate the interior and exterior of the 6,667-square-foot site a contractor has not yet been selected to do the work and expects to open by late September.
* Jack's Restaurant and Cantina recently opened in Franktown Corners at Grove Street and Kietzke Lane. Felipe Estrada, owner of Jacks Cafe on Victorian Avenue in Sparks, and business partner Lilly Lopez leased the 5,072-square-foot space that formerly housed Micasa Too.
* Clary's Bar and Grill leased the former Foley's building at 2780 S. Virginia and should be open in August.
* Fiesta Mexicana 2, an expansion of the popular eatery in the North Valleys, leased 2,354 square feet in the Wildcreek Plaza at 2975 El Rancho Drive.
* Cadillac Ranch Saloon, a 6,000-square-foot restaurant at Plaza 800 shopping center at 2130 Oddie Blvd., is remodeling the interior of the space and hopes to open in late August.
In addition to picking up used restaurant equipment at deep discounts, tenants are securing exceptionally favorable lease terms from landlords, Mattison says.
"Smart people are taking advantage of the current economic situation," he says. "Prices are down and they have an opportunity to negotiate a more favorable lease rate or get other rent concessions to make deals that make sense for both parties."
Mattison says most deals being inked typically are below asking rates by as much as 30 percent. Restaurant leasing has spiked, in part, he says, because so many spaces are being offered with fixtures, furnishings and equipment in place from failed restaurants, which conserves tenant capital requirements and shortens the time it takes to open for business.
"It is worth more in place than in someone's garage, so there has been a good amount of negotiating going on to retain furnishings," he says. "We have been somewhat successful convincing landlords to keep the equipment in place and welcome new users with good concepts to the neighborhood."
Kelly Bland, senior vice president of the retail properties group of NAI Alliance, also has had some success in leasing retail space in the formerly vacant first floor of the Palladio. Ole Bridge Pub, whose owners also operate several other bars in the area, leased 1,245 square feet facing the Truckee River at First and Sierra streets.
A Subway franchise also signed a lease with Palladio LLC to take over the old Starbucks location. The entire first floor of the Palladio, which was built to house retail, had sat vacant after Starbucks closed that 1,550-square-foot location.
Both eateries are expected to open in the next two months. Bland says both deals came about from business owners seeking to capitalize on increased foot traffic in the area with the opening of Aces Ballpark, as well as traffic from tourists, nearby office workers and moviegoers.
"That downtown corridor at First and Sierra is kind of a hub of activity," he says.
Bland notes that NAI Alliance has seen an uptick in inquiries for space to house small quick-service restaurants, particularly in the downtown core.
"It is a good time for tenants to take advantage of reduced rental rates," he says.
