Phila. area is a hot site for restaurant concepts

Mark Bucher grew up in Philadelphia but sought his fortune elsewhere.

After developing casual, beef-based restaurants in the Washington area, he and his partners sought to expand to Atlantic City.

During their drive to scout the site, Bucher decided to take a detour to his hometown. They saw a thriving Center City, Bucher said.

"We decided that Philly was the place for us," Bucher said outside the future Medium Rare, in a new apartment building on the 1600 block of Sansom Street in Center City.

To those who follow restaurant openings, the Philadelphia region has been sizzling with activity. Medium Rare, whose menu is based on a $19.95 steak frites dinner, is expected to open this summer, joining other out-of-towners in what is expected to be a busy year for newcomers.

Down the street from Medium Rare will be the luxe Ocean Prime, from the Ohio-based Cameron Mitchell Restaurants. At the end of the block, the casual Luke's Lobster is going in. About 21/2 blocks away at 15th and Walnut Streets, ground is being broken for a Cheesecake Factory in a new building.

Nation's Restaurant News, the trade publication, recently reported that Philadelphia is among the 10 hottest restaurant markets in the United States.

The report, from data attributed to ChainLinks Retail Advisors and Terranomics Retail Services, mainly covers the chain world.

Many retail chains have already colonized the desirable highway and mall locations and are looking to grow in the untapped market in cities, appealing to tourists, theatergoers, and city residents.

"We're seeing a lot of traditional mall retailers adapting to urban environments," said John Usdan, head of Midwood Investment & Development, developer of the building that will house the Cheesecake Factory.

There is room for chains and independent restaurants, said Steven Gartner, president of Metro Commercial Real Estate. "Landlords have to weigh unique locals versus chains who can pay more, but the landlords know they need a project to have a good mix of both." By late summer, Chestnut Square, a development under construction at Drexel University, will have branches of the New York-based Shake Shack burger shop and Joe Coffee Bar, but also branches of local restaurants Zavino and Zama.

Philadelphia's location between Washington and New York makes it a gateway city for new concepts, particularly in the casual sector, said Laurence Steinberg of Fameco Real Estate, who brokers many Center City deals.

Among the other impending arrivals are Good Stuff Eatery, a Washington burger chain run by Top Chef contestant Spike Mendelsohn, and, next week, a Rittenhouse Square branch of Joe Coffee Bar.

The report in Nation's Restaurant News said Philadelphia was a key city for any brand planning a regional push into the Northeast, and cited the arrival of chicken-wing chains Wingstop and East Coast Wings & Grill. Richard Johnson, the Wingstop franchisee, is quoted in the article as saying Philadelphia "has been sadly lacking in wings." It also mentioned the meteoric ascension of Primo Hoagies in a town rich with hoagie shops.

Steve Beagelman of SMB Franchise Advisors, who has helped the franchising of such local brands as Saladworks, Rita's, Saxbys Coffee, and Philly Pretzel Factory, said competition is a good thing. It creates critical mass "and an area becomes a hub where everyone wants to be," he said. Franchises prefer opening multiple locations in a city to help expand their brand exposure.

David Orkin, a partner at Fameco Real Estate who brokers many chain-restaurant deals, said the Philadelphia region seemed resistant to economic highs and lows that buffet other cities. "When it hits the fan, we don't get hit," he said.

Philadelphia may have even more growth ahead. The region's 4.9 percent vacancy rate is the highest of the 10 cities, and its asking price of $26 per square foot for space is the lowest; Austin, Texas, also commands that rate. The other cities in the report were New York; Boston; Miami; Seattle; San Diego; Los Angeles; San Jose, Calif.; and San Francisco.