Restaurant churn: Is it the building or the business?

PANAMA CITY — Some commercial buildings in Panama City have a solid reputation for housing not-so-solid businesses.

But does a high turnover rate stem from the business or the building?

Patrick Jones, a principal broker with commercial real estate firm NAI TALCOR in Panama City, said it could be either.

“Usually it’s driven by parking, access and visibility,” Jones said. “Some things are location driven, but some things are concept driven.”

The vacant building at 741 23rd Street, next to the Wal-Mart shopping center, has seen its fair share of restaurants over the years. Most recently, it housed Genghis Grill, a new-in-market franchise that opened in the summer of 2012 and closed abruptly about a year later.

“In this particular case, you have good access,” Jones said of the building, formerly a Roadhouse Grill. “You’ve got sufficient parking, you’ve got visibility, you’ve got the things that you need.”

Jones isn’t the only one to see its potential.

After being vacant for less than a year, the 6,390 square foot building is now under contract for sale, though the deal has not yet closed.

A high-turnover building in Callaway also has a new owner, with intentions to establish a well-known restaurant in the Tyndall Parkway location, according to Jones.

Located at 532 N. Tyndall Parkway, the building has been empty since Smugglers Sports Bar and Grill closed in the spring of last year. Smugglers was one of at least three businesses that failed to stay open at the location, a list that also includes Larry’s Real Pit Bar-B-Q.

As far as commercial real estate goes, Jones said business in Northwest Florida has been steadily on the rise. NAI TALCOR focuses solely on commercial real estate and property management in Bay County and Northwest Florida.

“Commercial real estate has pulled itself out of the doldrums pretty authoritatively,” he said, citing a more stable position for the business community as the economy improves.

It’s an environment many Panama City businesses are eager to jump into, even in locations with a rocky past.

Tokyo Steakhouse opened at a high-turnover location in March, and Manager David Chi said the new restaurant has been well-received by the community so far, despite its high-turnover past.

The building, located among a gaggle of car dealerships and big box stores on East 23rd Street, has been home to several buffet restaurants over the years, including Yao Buffet, Royal Buffet and Ryan’s Grill Buffet.

But Tokyo Steakhouse has shed the buffet atmosphere with extensive renovations on the building, which recently earned the business the Bay County Chamber of Commerce’s Apple of Our Eye Award for Renovation.

Chi said opening a new restaurant is usually difficult no matter what the location.

“With a new restaurant, so there’s always room for improvement,” he said.