Most of these new concepts are springing up in either newer developments, or in high quality existing locations. This means they are paying a premium for the space, that added cost, coupled with a business model that needs high margins means they feel the squeeze especially hard if sales fall off.

For landlords with these concepts though, they need not worry too much. The types of spaces these concepts occupy are usually easy to back fill and who knows maybe your tenant is the next Chipotle!

Which new fast-casual chain will be the next Chipotle? This a question many investors and landlords wonder and ask. Competition is fierce for these chains across the country. The demand for a small footprint in a premium location is also high. A surge of new fast-casual restaurants has flooded the market in recent years, but not all of them have succeeded.

In the last 10 years many chefs started moving away from traditional sit-down restaurants to fast-casual restaurants where they can do a higher volume, and perhaps make bigger profits in smaller spaces. That's the theory anyway.

Let's start with the explosion of gourmet burger joints that started with Shake Shack in 2005 and now we have Smashburger, BurgerFi, Burger 21, BGR: The Burger Joint, Hopdoddy Burger Bar, and Elevation Burger to name a few. But it's not just burgers, there are healthy eateries such as Sweetgreen, Chopt, and Sweet Leaf opening across the country catering to the change in consumer food demand. Not all of these fast-casual chains have managed to be successful though. Cosi declared Chapter 11 bankruptcy and shut down more than a third of its company-owned stores. Another popular chain, Noodles & Company plans to close 55 underperforming restaurants. Many of the upscale burger restaurants have also struggled of late. For example, Smash Burger closed stores in Chicago, Bethesda, and the Twin Cities just this year that were underperforming.

The performance of these concepts tends to look like a parabola; early initial success followed by plateau and then ultimately a decline to a steady state that is often not sustainable. One of the factors that has hurt many of them is price and perceived value. While the shift in customer demand has been towards healthier or higher quality options ultimately price and perceived value seems to matter more. A $15 hamburger isn't going to be a daily option for most consumers.

Most of these new concepts are springing up in either newer developments, or in high quality existing locations. This means they are paying a premium for the space, that added cost, coupled with a business model that needs high margins means they feel the squeeze especially hard if sales fall off.

For landlords with these concepts though, they need not worry too much. The types of spaces these concepts occupy are usually easy to back fill and who knows maybe your tenant is the next Chipotle!