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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Colorado

Population: 5,024,748

Projected population increase: 1.4%

Employment change: +0.4%

Real disposable personal income: +1.8%

2010 restaurant sales: +2.9%

Real estate sales volume: -29%

Real estate sales prices: -16%

Real estate availability: +12%

States: NM, AZ, UT, CO, WY, MT, ID, NV

The future looks bright in Colorado, especially for restaurants. According to the National Restaurant Association, restaurant sales are expected to increase 2.9 percent in 2010, which is the best in the nation.

David Fried, senior vice president of Denver-based Fuller Real Estate, says a stable economy and growing population make Colorado an attractive spot for quick serves—if the market is right.

"Colorado is a great market for real estate, at least opportunities within highly populated areas," Fried says. "There are certainly many opportunities all over Denver metro with so much growth we've experienced over so many years."

A lot of markets within Colorado are overcrowded, Fried says, because "there was too much development against the rooftops that were projected."

Aside from the Denver metro area, Fried says Boulder is another market in Colorado that is proving to be successful.

"If you want really good quality locations, you're going to expect to pay between $25–$35 a foot, triple net," he says.

Texas

Population: 24,782,302

Projected population increase: 1.8%

Employment change: 0.6%

Real disposable personal income: +2.1%

2010 restaurant sales: +2.7%

Real estate sales volume: -15%

Real estate sales prices: -14%

Real estate availability: +9%

States: MN, IA, MO, AR, LA, TX, OK, KS, NE, SD, ND

Everything's bigger in Texas, but before the recession, retail development was threatening to become too big.

"We've been historically adding 3 million square feet a year," says Vaughn Miller, president of the Retail Division at Henry S. Miller Brokerage LLC, of the Dallas-Ft. Worth metroplex. "The good news is I think that's going to dwindle down to next to nothing. That will give us an opportunity to lease the space we have."

Real estate sales volume in Texas dropped 45 percent in the third quarter of 2009 over the same period in 2008. Availability of commercial real estate is expected to increase 15 percent between the third quarters of 2009 and 2010.

With so much space available and the economy finally turning around in Texas, Miller says now is the best time for quick serves to buy real estate.

"To purchase a property, we're seeing premium lots go for anywhere from $400,000 a lot to $800,000," he says. "And that same lot, three years ago, would have been $600,000–$1 million."

Population totals and U.S. ranks are courtesy of the U.S. Census Bureau and based on July 1, 2009, figures. Pitney Bowes Business Insight growth scores are for 2009–2013 with a national average of 100. Population, employment, real disposable personal income, and restaurant sale projections courtesy of the National Restaurant Association 2010 Restaurant Industry Forecast. Real estate sales volume and sales prices are a comparison between Q4 of 2008 and 2009, while availability is what is expected in 2010; all are courtesy of the National Association of Realtors' Commercial Real Estate Quarterly Market Survey, March 2010.

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