Florida Real Estate Journal

Out on the town
By: Hortense Leon, Florida Real Estate Journal
Last Updated: Tuesday, February 26, 2008

The restaurant and nightclub business has more than a fleeting connection to the entertainment business. And no one knows this better than Athan “Tom” Prakas, president of The Prakas Group. The 52-year-old owner of the Boca Raton-based commercial real estate brokerage company, which specializes in restaurant and nightclub sales and leasing, represented Danny DeVito as the exclusive broker for the actor’s chic South Beach restaurant, DeVito South Beach, which opened in June 2007. Prakas also recently brokered the sale of the glamorous La Vieille Maison, Boca Raton’s most famous French restaurant for more than 30 years.

A 25-year veteran of the restaurant and nightclub industry, Prakas has owned and operated 27 restaurants, nightclubs and sports bars during his career in Ohio, Atlanta, and South Florida. And this experience guided him toward establishing the Prakas Group in 2000.

Prakas has arranged many transactions in South Florida over the last eight years, with some outside of the region, but he is most well-known for his work in Delray Beach. In fact, the Prakas Group has done 42 deals in that northern Palm Beach city and brokered 23 of 26 restaurant leases on Atlantic Avenue in downtown Delray Beach in the last four years. 

And last fall, Prakas teamed up with The Finance Group, a mortgage broker that is now a division of the Prakas Group. It finances deals, mostly in the restaurant and hospitality industry, between $3 million and $10 million.

In 2006, Prakas opened an office in Orlando, and The Prakas Group in January 2008 brokered a lease for a 10,000sf space for Valentino’s Vin Bar, a restaurant chain that started in Las Vegas. The Orlando location is the former site of Lee’s Lakeside restaurant on the south shore of Lake Eola in downtown Orlando, which has been closed for a couple of years, said Prakas. The restaurant is expected to open in another three to four months.

On Jan. 1, 2008, The Prakas Group became a partner with the Florida Restaurant and Lodging Association. It has taken over the organization’s business opportunity Web site, which is designed to help clients who want to sell their small businesses, including restaurants, for less than $150,000. The Web site is called RestaurantBizSales.com and is run by Prakas’ wife, Donna. “It was a service we saw a need for,” said Prakas, because so many small businesses today get their start on the Internet.

Although Prakas is not planning any more expansions of his business for the foreseeable future, he is optimistic about the restaurant and nightclub business in Florida in the long run, even though he sees that in the near term, growth is slowing down. He has had deals recently that were contingent on the financing of restaurant properties and/or financing for larger projects, of which the restaurant was a part, collapse. Not every deal closes, especially in a tighter credit market, said Prakas.

In the commercial market, said Prakas about non-restaurant deals, the slowdown is just starting and will last through 2008. “Maybe it will turn around in 2009, when the credit markets get cleared out. Something has got to happen by then,” he said. “The housing market should bottom out, and the commercial market should follow shortly after that.”

“Meanwhile, the (income) stream looks good on the sales and leasing side (of The Prakas Group),” although it is unpredictable, Prakas said. “We are not a retail business with bricks and mortar. Our sales are abstract. In January, we could have $20 million (in deals) and nothing in February and March,” he said, while noting that he does have a couple of significant deals scheduled to close in March or April.

Although retail rents vary greatly, depending on the area, they don’t seem to be going down at this point, said Prakas. This is especially true on Las Olas Boulevard in Fort Lauderdale and on Lincoln Road on South Beach, which are trendy areas. As for other, less chic locations in South Florida, he said that while in most places “we don’t see a softening yet,” there is a lot of room for variation. In secondary locations, such as in Wellington, Coral Springs and Pembroke Pines, there may be a little weakening in the future, said Prakas.

One thing helping to buoy up revenues in restaurants and nightclubs, added Prakas, is the weak dollar. Many patrons and restaurant buyers from England and Ireland, where the euro is the official currency, are taking advantage of the situation, he said. These buyers are looking all over, not just in the trendy locations, Prakas noted.

Much of South Florida’s restaurant and hospitality business is doing well compared to other places in Florida, he said. North of Sebring and in the area between Tampa and Naples “where homes are empty and dark,” the restaurant business has been adversely affected, he said. But in South Florida, even in locations like A1A in Sunny Isles Beach, where there are a lot of unoccupied luxury condominiums, there is still a large resident population and customers for restaurants, although customer traffic will pick up once the residential units are sold, said Prakas.

But in the PGA corridor in Palm Beach County, where lots of chains have recently opened new restaurants, “it is hard to fill all the seats until the residential units fill up,” said Prakas. It is just the opposite on Lincoln Road. Not only are there crowds of customers, retail rents have doubled over the last five years, he said. They were in the $40s and $50s psf. But today, they are closer to $100 psf, he said.

Email The Prakas Group