NJ RESTAURANT LICENSES
4. Bridgewater Mall in the Bridgewater market has matured. Restaurant leasing activity has slowed.
Many down towns in NJ have enjoyed a renaissance. Westfield, Red Bank, Ridgewood and the college town of Princeton, both Borough and Township, have nurtured the downtown area over the years and it seems to have rewarded the participating restaurants with outstanding volumes. License availability is very tight now in these areas.
Restaurant liquor licensing in the urban centers of NJ is still plentiful. These towns include Paterson, Newark, Trenton, Clifton, Camden, Perth Amboy and Atlantic City The issue is that cities issued licenses far in excess to what the population needed. In 1948, the Legislature promulgated the a new law restricting towns to issuing licenses based ONLY on their population and subsequent growth. The above referenced towns were grandfathered and were allowed to keep the licenses that they had issued in excess of the mandate. Supply is available and cheaper when compared to the Mall areas. Development is restricted in these towns because of a lack of available acreage for shopping centers and their chain restaurant pad sites. Chains have traditional avoided downtown areas, choosing to expand in the car driven markets of NJ. This too has added to the depressed pricing in urban areas.
Just as an aside, it is my view that the urban areas of the state afford the enterprising restauranteur the largest upside in the state of New Jersey. I say this for several reasons:
1. Population density of the cities
2. Pricing of the liquor licenses
3. Urban transportation network.
Restaurant licenses prices in the central Jersey areas have remained flat or declined.
East Brunswick, South Brunswick, and New Brunswick, lack of development has contributed to the fall off in demand for licenses. Independents have not taken up the slack. To sell a plenary retail consumption 33 license in this area of New Jersey, it must be priced aggressively.
South Central Jersey has seen some upward pricing pressure. License availability is very tight in this market, with upwards pricing pressure. Hamilton Township and West Windsor are tight markets for liquor licenses.
South Western Jersey has seen some tremendous price swings. Cherry Hill sold a license for $1.5 million dollars. In October 2011, the price of a 33 restaurant license at auction was $500,000. Recently several have traded and the inventory has again become low. Pricing is accelerating. Evesham Township aka Marlton and Deptford, are among the highest priced.
South Eastern Jersey Shore communities have trended higher through 2013.
Toms River has seen expansion of its Ocean County Mall, but license availability has tightened considerably. Brick has added several exciting concepts, again the prices trending higher.
Speculators of restaurant licenses beware. Check out this link to another blog of mine.
across the state of New Jersey
Individuals and companies can hold no more that two retail liquor licenses, a decades-old restriction that has kept chain stores from gobbling up licenses. There are 1,791 such licenses throughout the state, including a limited number already owned by a few supermarkets.
Approximately 5% of these licenses are held in the "pocket"
For the definition of a pocket license, click on this link, go to item #8.
These licenses trade infrequently for several reasons:
1. Price, unrealistic asking prices from their owner.
2. Township laws regarding the placement of the license in the community.
Before placing a pocketed license, one must thoroughly check the zoning and planning rules in the community. My suggestion would be to hire an attorney to assist in the process.
3. Over-abundance of sighted licenses in the community. (too much competition already)
4. A pocket distribution license is usually a unique asset.
Values of unique assets are difficult to price without a business context; i.e., a business attached.
5. No comp sales to gauge a price.
Pocketed licenses trade for $50,000 to $200,000, sometimes more, again depending on who is buying and who is selling.
Township local auction for distribution licenses
Click on this link for 2014 proposed auctions and explanation of the auction process.
Phone me at 908-403-2718