Growth | June 2010 | By Sam Oches

6 Markets You Don’t Want to Miss

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Six markets in the U.S. are primed and ready for opening quick-serve restaurants
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North Carolina

Population: 9,380,884

Projected population increase: 1.6%

Employment change: -0.4%

Real disposable personal income: +1.4%

2010 restaurant sales: +2.7%

Real estate sales volume: -19%

Real estate sales prices: -18%

Real estate availability: +10%

States: WV, VA, KY, TN, NC, SC, GA, FL, AL, MS

Between July 1, 2008, and July 1, 2009, the population of North Carolina grew by 133,750, the third-highest amount in the country behind Texas and California.

Marty Kotis, president and CEO of Greensboro, North Carolina–based Kotis Properties, says the continued growth potential of the state is what makes it such a hot market.

"A lot of people are moving to the area because they like the quality of life here," Kotis says. "Cost of living is another factor, and the fact that we're a right-to-work state, our labor is plentiful and it's priced appropriately."

Kotis calls North Carolina a "market that you prioritize" because real estate and construction costs are still low, while sales are going up. The fact that the state has the second-largest state-maintained road system, he says, is also beneficial for quick serves.

"That's a key factor for quick service, because it's all about traffic count and good roads and access," he says. "North Carolina is still moving forward with all of its outer-loop projects around various cities, people are able to get around pretty easily."

Kotis says the Raleigh and Greensboro metropolitan areas are two markets that are ripe for expansion.

Expansion in Charlotte, Kotis says, "got a little overheated," and is a good example of why quick serves should invest in smaller, outlying areas of North Carolina with less competition and more potential for profit.

"If you go to a small market you might be looking at $10 a square foot or less for land, so $400,000 for a site," he says. "For a hot market you might pay $1 million an acre for a site."

Washington

Population: 6,664,195

Projected population increase: 1.2%

Employment change: -0.1%

Real disposable personal income: +1.6%

2010 restaurant sales: +2.4%

Real estate sales volume: -3%

Real estate sales prices: -10%

Real estate availability: +11%

States: CA, OR, WA, HI, AK

Though the Pacific region of Alaska, California, Hawaii, Oregon, and Washington is expected to lose more jobs in 2010 than the national average, according to the National Restaurant Association, income and population levels are expected to be at or above U.S. averages.

California has traditionally been the economic heavyweight of the region, but the recession left the Golden State hurting—making Washington a safer bet for expansion.

"The general economy is a little more stable than some of the other markets around the country," says Tricia Deering, executive director of the Commercial Brokers Association in Kirkland, Washington. "There's a really good economic employment base here, and they tend to be higher paid jobs, with Microsoft, Boeing, and the Gates Foundation, and some of the other organizations that are headquartered in Washington."

According to the NRA, Washington's real disposable personal income in 2010 is expected to increase 1.6 percent, while employment is only supposed to decrease 0.1 percent. That compares with 1 percent and 1.1 percent, respectively, for California.

Deering says the Puget Sound area of Washington around Seattle and Bellevue is the best bet for profitable real estate, as is Spokane to the east. The central part of the state, however, is not as successful.

"It's not really strong at this point; they depend a lot on agricultural and seasonal employment," she says.

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