Why Landlords Are Aching for Poke

Michael Pakravan is a VP at Kennedy Wilson.

LOS ANGELES—Poke is the latest craze to hit the fast casual restaurant boom, according to Michael Pakravan , VP at Kennedy Wilson and a fast-casual retail specialist . He recently signed three new poke restaurant leases in Los Angeles on behalf of Hoke Poke , OkiPoki and Honeyfish Poke . Consumer demand for the product type is soaring, and driving dozens of new concepts to open, sometimes in close proximity to one another. As a result, retail landlords are requesting poke restaurant concepts in their centers. To find out more about how poke openings fit into the broader fast casual niche and if it just a fad or if it here to stay, we sat down with Pakravan for an exclusive interview. GlobeSt.com: How does this increase in poke restaurants fit into the fast-casual trend we have been talking about? Michael Pakravan: Poke fits perfectly in the fast-casual trend. It is affordable, it is customizable and it is Instagrammable. On top of that, it is healthy and can be prepared very quickly. If you look at some of the characteristics that we have talked about in the past regarding fast-casual restaurants, you see a lot of those elements with poke. Customers have the ability to customize, similar to Chipotle or pizza concepts where you get to literally pick every topping. Optionality is important. For example, Hoke Poke is a new poke shop that is opening downtown, and they give customers the option of ordering one of five chef-designed bowls or the option to create a personalized combination. Optionality is really key. Sushi is not typically something that has performed well at lunch, primarily because of pricing and speed. Poke gives customers their sushi fix in a very affordable and quick package. In terms of social media, poke is also sexy. It makes the dining experience worthy of social media, whether it is an Instagram post or SnapChat, which gives new concepts that don’t have thousands of dollars set aside in their marketing budget the opportunity to spread the word. GlobeSt.com: Is this just a food trend, or is this a concept that is here to stay? Pakravan: People often ask that. We are already seeing it is Scottsdale and New York and Northern California, so it seems like it is not just a hip trendy L.A. fad. There have been so many of these concepts that have opened up in markets all over the country. There have been a handful of clients on the landlord side who have asked us about this poke trend and to find a concept for their center, and we really have Sweet Fin to thank for that. They are the leader of the pack when it comes to poke expansion and branding. They definitely have the sexiest product. They opened in Santa Monica a year-and-a-half ago, and they are now on schedule to open four more stores. That has been really good for poke in general and poke’s expansion nationally. I have talked to dozens of poke operators, and there is not one store that I know about that is struggling. I don’t know a sector in QSR that is growing as rapidly as poke, even comparing it to pizza—and we have seen so much growth in pizza—but if you look at where poke was six months ago and where it is today, the growth is off the charts. When you are working with a very specific type of cuisine, like poke, does the leasing process become more difficult? Pakravan: It actually becomes easier. I do tenant rep work for Jersey Mikes, I represent them in Los Angeles, and they have been expanding. The one factor that inhibits their growth is the fact that most shopping centers in Southern California already have another sandwich shop. With poke, you don’t really have that issue, and so operators don’t have that challenge when searching for new sites. The flipside to that and the one challenging aspect is just educating the brokers and landlords as to what poke is and how it is not likely to be just a trend. GlobeSt.com: There have been a lot of new poke restaurants to pop up in Los Angeles, and some of them in relative proximity to each other. Is there enough demand to support all of these restaurants? Pakravan: There are two things happening. One is the increase in density and the creation and recreation of neighborhoods with the urbanization of Los Angeles. You get a lot of these submarkets with a live-work-play environment where people don’t commute back-and-forth to work and they don’t need to go very far for a meal. The other part of it is that people love this stuff. The more options that they have, the better. It is affordable, and it is fast. It really checks all of the boxes of what someone is looking for today in a fast casual restaurant. The more the merrier. There are also a lot of different concepts within the poke space as well. There are concepts like Oki Poki that have six bowls on their menu, and there isn’t a lot of optionality and customization. Then, there is Poke Bar in Studio City that doesn’t have any chef-designed bowls. Everything is up to the customer to create. So, within poke, there are subspaces as well. You also have to think about how far people travel for lunch. Usually, it isn’t that far. If you have a half-mile between stores in a dense market like Downtown Los Angeles, you aren’t cannibalizing your stores in any way. GlobeSt.com: What does this specific food trend say about cultural shifts in food and dining that retail landlords should consider? Pakravan: A lot of our clients see this trend and understand why it’s hot, but a lot of times we have to educate our clients and remind them that when merchandising a project, they should be thoughtful in creating the right synergies and creating the right line-up, not just making decisions based on the financial strength of a tenant or the credit worthiness of a tenant. It really is about creating the right synergy. You need a poke restaurant; you need a ramen shop; there are a lot of new Mediterranean restaurants that are doing well. You need different flavors and a different experience and not just the corporate or franchise options that are out there.