San Clemente In-N-Out | What's Going On?
By some miracle above, San Clemente has taken serious considerations to yet another development project in 2019, which now marks number 12 on the city's list of proposed projects. After what appeared to be behind-the-scenes negotiations between California Bank of Trust, In-N-Out and Gregori & Gregori LLC (the owners of the CB&T building), In-N-Out is now deadset on replacing the old location of the bank with a brand new franchise restaurant. CB&T has already moved across the street to where the old organic market used to be.
What We Can Expect to Happen
From the perspective of a Commercial Agent who lives in San Clemente, you can expect a few things to happen:
1.) You See That Proposed Design Work Up There? That's Not Going To Fly With The City Board.
The city of San Clemente, for better or worse, is notorious for requiring all businesses regardless of size & revenue to contort to the Spanish Revival architecture that the Spanish Village by the Sea is known for. A revision has already been made by the city, and you can see their proposed design below.
2.) It's Going To Be A While Before We See Changes To The Existing Building
Commercial Real Estate is a slow process. Once In-N-Out is undoubtedly green-lighted to begin demolition/construction on Via Pico, it will still be a long time before we get to taste a single animal fry or 4x4 burger. If approved by the end of 2019, I personally expect doors to open around the same time next year (October). Delays are also fairly common so that date could be pushed back to possibly January depending on the kind of delay.
3.) When We Do See Changes, Pico Plaza Won't Be The Same
Pico Plaza has been struggling to bring consumers in for a very long time. With the 99c Store being the last Anchor Tenant (the main attraction), consumer traction is almost none-existant. Staples struggled for years before finally shutting their sliding doors for the last time in August, and the other larger tenants (Fitness 19, Del Taco, Z Pizza, & Pho Thanh Binh) aren't nearly large enough in size to fill the massive parking lot.
With In-N-Out coming in, you can expect a much-needed increase in traffic to the plaza. How it will affect neighboring tenants, however, is completely up in the air. It could likely spur the demolition and reconstruction of the old Keller Williams building next door, but only time will tell if Pico Plaza can be restored to it's true desired state.
So, What's Next For This Project?
Currently, In-N-Out's 27-page proposal application is under review. Revisions have been made by the city and realistically, not much is left to negotiate. In regard to who will own the property, Gregori & Gregori still own title to the lot but will more than likely sell it for a substantial amount of cash.
Like Starbucks, In-N-Out is known for utilizing what's called a 'Ground Lease' operation. Essentially, In-N-Out will own the lot itself but sell the building and business rights to a new franchisee who will reap the profits (after royalties are paid, of course). McDonald's made this style of franchising popular, and it's what made them the number 1 owners of Real Estate in the world at one time.
What do you think of this project? Have you considered owning a business before or franchising a corporate store? Tell us your thoughts down below in the comments. Also, feel free to sign up for a free 15-minute phone call with Wyatt by clicking on our home button above. He'll answer any questions you may have about Real Estate, and also reach out to assist you if you need any help buying, selling, or figuring out how to get out of the current predicament you're currently in.