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VOL. 127 | NO. 160 | Thursday, August 16, 2012

Market Entrance

Panda Express launches Memphis presence with Cordova locale

By Sarah Baker

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The quick-service food concept Panda Express has entered the Memphis retail market on the city’s highest-trafficked surface street.

Supervisor Steven Stadler of Candito Construction Corp., right, and Steele McCommon of Ralph Jones Sheet Metal work on a Panda Express store at Trinity Road and Germantown Parkway in Cordova.

(Photo: Lance Murphey)

The Chinese restaurant chain will open a 2,665-square-foot new prototype store in Cordova in early September at 577 Germantown Parkway in front of Walmart Supercenter.

The Panda Express will mark parent company Panda Restaurant Group Inc.’s 1,500th store and first in West Tennessee, after locations in Chattanooga and Nashville and its surrounding areas. The restaurant is similar in menu concept to Pei Wei Asian Diner but with a much larger nationwide retail footprint.

“It’s a pretty big deal for us to have 1,500 stores,” said Thien Ho of Panda Restaurant Group’s corporate relations in Rosemead, Calif.

Founded in 1983, Panda Express is the largest Chinese fast casual chain in the U.S. It historically has operated in shopping malls, casinos, supermarkets, airports and college campuses.

Panda Express started opening standalone restaurants in 1993 and drive-thru locations in 1997. Like many other national retailers, the restaurant seeks real estate with high visibility, high traffic counts and often end-cap or freestanding locations.

The new Cordova store will be freestanding, using one of the existing Walmart curbs at Germantown Parkway near Trinity Road. Panda Restaurant Group bought the half-acre pad side in April from Wal-Mart Real Estate Business Trust for $650,000.

“Panda prefers to locate on or near strong retail anchors, such as Walmart and Target in this location,” said Laura Lund, director of real estate for Panda Restaurant Group. “The trade area must have a good residential base population and daytime employment as well.”

Danny Buring, partner with The Shopping Center Group LLC, represents Panda Restaurant Group in West Tennessee. He said traffic counts at Panda Express’ new location are 60,000 per day.

“It’s a great intersection with Kroger, Walmart and Target,” Buring said. “It’s about one of the highest traffic counts you’ll see on a surface street in Memphis. There’s some great fast casual restaurants that are around there that do very well as well as the fast food. It’s just a great first site for them to be able to nail.”

Panda Express’ customizable menu will join other national concepts that have expanded into Memphis in recent years like Genghis Grill, Chipotle Mexican Grille, Five Guys Burgers and Fries, and dozens of weigh-and-pay frozen yogurt stores.

And it’s just one note of activity in the local retail real estate market. The second quarter was marked with a decrease in vacancy to 13.8 percent, a second straight quarter of positive absorption at 27,544 square feet, and continued increase in asking rental rates, which averaged $9.57, according to CB Richard Ellis Memphis’ Q2 MarketView report.

Lund said the Cordova restaurant is the first to unveil Panda Express’ “Blocks of Flavor” design concept, which is debuting its new locations throughout the U.S. and will be incorporated into existing restaurants as they are remodeled. The design gives a “fresh and modern look” with “an inviting and warm atmosphere.”

In addition to the Cordova store, Panda Express also has two other deals in the works in the Memphis area, both located near Walmart Supercenters – one at the intersection of Tenn. 385 and Winchester Road, and one at the intersection of Poplar Avenue and Maynard Way in Collierville.

“The locations were chosen for their strong demographics and the retail generators,” Lund said.

Each site is under contract for Panda Restaurant Group to purchase and build on. Each store will employ 15 to 20 associates.

Panda Express has also leased a space in Jackson, Tenn., that’s under construction. It will take the end-cap of a three-tenant building on Van Drive in front of The Columns master-planned retail development.

Still more Memphis-area Panda Express stores could be on the horizon.

“We believe that the Memphis market can hold up to six units in the next five to 10 years and plan to build up to 10 in the longer term,” Lund said.

Meanwhile, company founder Andrew Cherng is tenatively scheduled to be in attendance at the Panda Express’ Cordova grand opening. The ceremony will denote an addition to Memphis’ growing retail portfolio and a milestone for the system of restaurants Panda Restaurant Group owns.

The privately held company, which touts on its website that it is “aggressively seeking new locations,” is unique in nature in that it does not offer franchises, Buring said.

“It’s pretty unusual for any concept to be that size and not have used kind of outside money, whether it’s a franchisee or a licensee to grow like that,” he said.

PROPERTY SALES 23 23 1,365
MORTGAGES 21 21 1,068
BUILDING PERMITS 117 117 3,173