Dear Restaurant Recipe,

The restaurant business has never been easy, but contemporary conditions make it unusually hard. Today, only those whose bravery overshadows their risk aversion open restaurants. The high risks are very often at least partially transferred onto the wallets of optimistic investors who are promised the side benefits of some “free meals” and the status of being reservation preferred diners.

There are three primary reasons why opening a restaurant in today's environment is more difficult. First, the increase in the minimum wage, as well as increasing pressures on restaurants to provide advance work schedules. Second, the increasing gap between restaurant and retail prices, which widens the spread between eating out and shopping for groceries to “eat in.” Third, diners have more options to purchase restaurant-quality meals outside of restaurants — there are better choices in prepared foods at groceries, more grocery stores are offering free delivery, and a host of firms that prepare and deliver food you can order digitally have entered the food service arena.

If your center requires food service operations to attract your customer base, I'm afraid your only course is to accept these tenants as loss leaders. But, to look on the bright side, the need to offer very good rental deals and maybe one of those optimistic investors may help enable you to select those restaurants most likely to appeal to your customer base.

SAN FRANCISCO—Wouldn't it be convenient if someone had clear, intelligent answers to most of your CRE-related questions? Problem solved. Nina J. Gruen, a.k.a. Ms. Real Estate, a.k.a. the principal sociologist overseeing market research and analysis at Gruen Gruen + Associates, is here to answer readers' questions.

Dear Ms. Real Estate,

I have been experiencing difficulty in attracting restaurants to my neighborhood shopping center. Over the last six months, two went out of business and I have not been able to replace them. As you well know, it's difficult to attract traditional retail tenants given the increasing appeal of the internet, while food and other services still attract customers. Suggestions?

—Rejiggering My Restaurant Recipe

Dear Restaurant Recipe,

The restaurant business has never been easy, but contemporary conditions make it unusually hard. Today, only those whose bravery overshadows their risk aversion open restaurants. The high risks are very often at least partially transferred onto the wallets of optimistic investors who are promised the side benefits of some “free meals” and the status of being reservation preferred diners.

There are three primary reasons why opening a restaurant in today's environment is more difficult. First, the increase in the minimum wage, as well as increasing pressures on restaurants to provide advance work schedules. Second, the increasing gap between restaurant and retail prices, which widens the spread between eating out and shopping for groceries to “eat in.” Third, diners have more options to purchase restaurant-quality meals outside of restaurants — there are better choices in prepared foods at groceries, more grocery stores are offering free delivery, and a host of firms that prepare and deliver food you can order digitally have entered the food service arena.

If your center requires food service operations to attract your customer base, I'm afraid your only course is to accept these tenants as loss leaders. But, to look on the bright side, the need to offer very good rental deals and maybe one of those optimistic investors may help enable you to select those restaurants most likely to appeal to your customer base.