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January 30, 2024 MWCRE Market Pulse

Posted by Jerad Giottonini on February 6, 2024
Annie’s Diner in Kaysville Opens Books to Show Financial Struggle Facing Mom-and-Pop Restaurants


  • Annie’s Diner, a family-owned establishment in Kaysville, Utah, faces financial struggles, a common challenge for small businesses. Owner Jason Sanders, who acquired the diner in 2020, revealed a $93,379 loss in 2023, despite revenue exceeding $1.3 million.
  • Reported expenses include:
    • Labor Costs: $602,775
    • Food Costs: $405,600
    • Property Costs: $196,873
    • Other Costs: $132,865
    • Taxes: $90,116
    • Loss: $93,379
  • The volatility in food costs presents a significant obstacle for small restaurants. During a spike in egg prices, Annie’s monthly egg order of $2,500 only lasted 10 days.
  • With 66 employees, Annie’s can have 24-30 staff working on Saturday mornings. Sanders noted that employing any fewer staff leads to negative reviews. Despite having long-term staff, Sanders consistently posts job openings on, anticipating regular turnover.
  • Fortunately, the substantial financial losses incurred in operating the restaurant have been offset by the increased real estate value of Sanders’ Kaysville property.
  • Jason Sanders encourages support for local mom-and-pop establishments, emphasizing their vital role in the community’s survival: ‘Go to your mom and pop restaurants. Help them stay open. Without that, they may not be around much longer. So go.'”

By Saundra Fife

New Companies Coming to Utah  
  • Pepper Lunch, the Japanese fast-casual concept with over 500 global locations, has inked its fourth North American development deal with Gemba Partners in Utah. Owned by Charles and Catherine Johnson, Gemba Partners is slated to open five Pepper Lunch units in Utah by late Q4 2024. Established in 1994, Pepper Lunch is renowned for its DIY teppanyaki-style dining, presenting affordable and unique dishes that allow guests to ‘Sizzle It Your Way’.
  • Mars-owned Nature’s Bakery is investing $237 million in a new 339,000-square-foot Salt Lake City facility, operational by July 2025, boosting Western U.S. operations, employing 190+ people.
  • Acquired by Mars in 2020, the eighth best-selling brand in its category with products in 100,000+ retail locations, demonstrating confidence in Utah’s business environment and health-conscious lifestyle alignment. Mars, with $47+ billion in annual sales, is a global leader in candy, ice cream, and pet food brands.
  • Tract completes acquisition of 668+ acres in Eagle Mountain, UT within the Regional Technology Innovation Overlay for data center use, with plans to deliver 400+ megawatts of new transmission infrastructure by 2028 in collaboration with Rocky Mountain Power. The strategic development aligns with Utah’s data center sales tax exemption and low power rates, supporting responsible infrastructure growth and economic development.

By Dan Bradford

Survey Split on What Is In
Store for Western CRE in 2024
  • There were 130 brokers, managers, owners and developers that responded to a recent Western Real Estate Business survey on forecasts for 2024. Of those surveyed, 35% believed their firm’s transaction dollar volume would be higher in 2024 than it was in 2023, 39% predicted it would be lower with the balance (~26%) forecasting a similar volume in 2024 to 2023.
  • The developers, owners and managers group also answered questions on whether they would be net buyers (42%) or planning to break ground on a project in 2024 (58%).
  • Of the respondents indicating they planned to break ground on a project in 2024, retail was the top asset type for development at 37%, followed closely by multifamily (33%) and industrial (27%) with mixed-use (13%), office (7%) and hotels (6%) further back.
  • One of the respondents, Vedanth Shetty from Grandway Group in Los Angeles, summarized respondents’ development sentiments saying, “The greatest opportunity for the commercial real estate industry in 2024 lies in industrial, multifamily and necessity-based retail. Industrial continues to benefit from low vacancy rates and the growth of online retail, while multifamily is buoyed by strong population growth and a lack of supply, making it resistant to recessionary pressures. Necessity-based retail, particularly grocery-anchored developments, is seeing a resurgence due to limited new retail supply and strong community demand.”
  • Respondents also weighed in on the office market, and 28% were uncertain if office building utilization would ever return to pre-pandemic levels, followed by 26% responding that pre-pandemic office space utilization would never return and 18% saying three years. The balance of responses was somewhere between 6 months to 2.5 years.

By Rich Lachowsky

Consumers Are Taking Longer to Pay Off Debt
as Consumer Debt Continues to Rise
  • The usage of buy now, pay later programs has surged over the last few years amid consistent inflation and rising interest rates.
  • Buy now, pay later consumers continue to rely on credit cards for a range of expenses, from fuel and groceries to travel and luxury, and are extending the time it takes to settle these debts.
  • In the third quarter of 2023, nominal balances on credit cards from major banks continued to rise. Delinquency rates now exceed pre-pandemic levels for the first time, nearing highs not seen since 2012. Responding to this trend, banks have scaled back on granting credit line increases and have been more frequent in reducing credit lines over the past year.
  • Total household debt rose by 1.3% to reach $17.3 trillion in the third quarter of 2023, according to the latest Quarterly Report on Household Debt and Credit. Mortgage balances increased to $12.1 trillion, credit card balances to $1.1 trillion, and student loan balances to $1.6 trillion.
  • Researchers at the Philly Fed discovered an increase in credit card delinquencies, with 3.2% of balances being 30 days late (up from 2.8% in the previous quarter), 2.2% delinquent by 60+ days (up from 1.9%), and 1.5% in serious delinquency of 90 days or more (up from 1.3%).
  • A larger proportion of individuals are carrying over some or all of their credit card balances. Philadelphia Fed data indicates that, as of the third quarter, only 33.2% of accounts cleared their balance completely, marking the lowest percentage since the fourth quarter of 2020.

By James Ice

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