Bars, Restaurants, Gyms & Real Estate: COVID-19’s Industry Impact

We continue to monitor industry changes in fields where we practice, legal and economic, as a result of the COVID-19 pandemic. 

Restaurants

5,500 restaurants are closing each month, which is up from 4,500 each month pre-Covid. In Chicago, an average of 12 to 15 restaurants open weekly, which is down from 25 to 30 restaurants pre-COVID. 

It will be interesting to see how restaurants develop from this pandemic from traditional operations (General Manager, Back of the House, Kitchen Manager, Bar Manager, Front of the House, and Dining Room Manager). The emphasis on take-out and delivery removes the element of servers introducing themselves with beverages or specials (“suggestive selling”). For many operators, the to-go approach is not enough to sustain a restaurant. Menu items are already being 86ed because of the pandemic, and we will see if these are long-lasting changes.

Source: RestaurantData.com

Real Estate

Unlike Chicago, where a $15,000 incentive “Move to Michigan” program closed in two weeks after its launch and two-thirds of applicants were from the Chicagoland area, the suburban housing market in Illinois is actually surging. 

According to a Crain’s Chicago Business article, year-to-date home sales in Riverside are up 53% and other suburbs are surging as well such as Lake Forest in which sales are up 51%. Additional suburbs with surging sales include the Barringtons (South Barrington, Barrington Hiils) up 47% and Highland Park (35%) and Kenilworth (32%). 

Source: Rodkin, Dennis. Crain’s Chicago Business. Chicago, Vol. 43, Issu. 38 (Nov 30, 2020). 

Still, real estate developers are drawing up ambitious plans for skyscrapers. Eterra Plus proposed two towers in Chicago to replace a parking structure at 525 S. Wabash Ave. that includes a 23-story building, 314 hotel rooms, and 261 apartments and a 36-story tower with 516 apartments. Crescent Heights seeks city of Chicago approval for increased zoning density to construct a 47-story tower with 413 apartments at 640 W. Washington Blvd. One of Crescent Heights’ projects include Nema Chicago, Chicago, tallest all-residential apartment tower. It may in some ways be the best time to engage in an ambitious, lofty project. 

Nema Chicago, the City’s Tallest All-Residential Tower(https://www.crescentheights.com/about/ch-overview)

Gyms, Boutique Fitness Studios

Restaurants and bars are not the only industry devastated due to COVID-19. Gyms and especially boutique fitness studios were decimated. The fitness industry, due to capacity limitations, have had to remove yoga, cycling, and other group sessions entirely. The industry is shifting to some virtual classes, but the industry with some 1,275 clubs, boutiques and that employs almost 59,000 in Illinois may be irreversibly damaged. 

The Chicago Boutique Fitness Alliance, which is a group of 250 studios, has sent Governor J.B. Pritzker a letter regarding the ban on group fitness classes. According to the Alliance co-founder, David Blitz, nearly a third of independently owned businesses have closed permanently since March and others are hanging on by the thinnest of margins. Gym operators want to be considered essential because they offer mental and physical wellness, which is especially needed during a pandemic.

Source: Illinois Fitness Alliance.