A customer arrives at a Darden Restaurants Inc. Olive Garden location in San Antonio, Texas, United States on Thursday, June 14, 2018.
Callaghan O’Hare | Bloomberg | Getty Images
Darden Restaurants currently does not see many real estate offers despite the high number of permanent restaurant closings due to the pandemic.
“There is tremendous speculation in the real estate market that is driving prices,” CEO Gene Lee told analysts on Thursday during the company’s quarterly conference call.
Lee has not elaborated on what the speculation means for Darden. However, restaurant chains that survived the downturn expected to get hold of closed locations at a discount or get more accommodations from landlords, e.g. B. permission to build a thoroughfare.
Industry tracker Black Box Intelligence estimates that 12% of full-service restaurants in the US that were open before the pandemic closed.
Private equity firms and other investors have stepped in and focused on commercial real estate. The Wall Street Journal reported in May that commercial property prices have risen since July, wiping out almost half of the pandemic declines.
In the fourth quarter of fiscal year Darden opened 14 new restaurants, bringing the total number of restaurants in its portfolio to 1,834, which include Olive Garden, LongHorn Steakhouse and The Capital Grille. Around 35 to 40 new locations are to be added in the 2022 financial year.
Darden’s shares rose 3% in afternoon trading after the company beat Wall Street estimates for the company’s fourth quarter earnings and earnings. The company said diners are returning to its restaurants, bringing sales in the same store almost back to pre-pandemic levels.