Mixed-use underwriting: separating the F&B from the fairy tale
Ground-floor food and beverage can animate a project, but the rent needs to survive restaurant economics.
01
Do not underwrite the rendering
A busy dining room in a marketing image is not a credit tenant. Build the retail case from seat count, realistic turns, average check, labor, occupancy cost, and the operator's capitalization.
02
Stress the rent
A sustainable lease leaves room for volatility.
- Occupancy cost as a share of sales
- Seasonal downside case
- Delivery and extraction constraints
- Landlord capital for specialist infrastructure
03
Value the right spillover
Good F&B may support residential absorption and identity, but do not capitalize that halo twice. Keep the restaurant's direct income separate from any defensible premium elsewhere in the project.
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