G
oat Hospitality Group is abandoning its Miami taco stand, Pilos Tacos at Paseo Brickell, after putting the lease on the market. The fully built-out space, which includes a kitchen and furnishings, can be rented for $17,000 per month. However, prospective restaurateurs will also need to pay $175,000 to take over the keys.

    This is not an isolated incident, as hundreds of restaurants across Miami-Dade, Broward, and Palm Beach counties have closed or are on the verge of shutting down due to a slower-than-usual summer, dwindling out-of-town diners, and oversaturated food concepts. Despite this, a steady stream of prospective operators is willing to pay six- and seven-figure sums on top of their monthly rent to take over fully built-out dining spots.

    "It's been a record year for restaurant closures in South Florida," said Felix Bendersky with F+B Hospitality. "But people don't see it or feel it because when one place closes, 10 operators are ready to take the space. The demand outweighs the inventory."

    The dining downturn has been exacerbated by rising rents and a lack of seasonality, which usually provides restaurants with a financial cushion during the slower summer months. This year's summer was particularly tough, with many restaurateurs reporting it as one of the worst on record.

    Chain restaurants like BurgerFi have suffered from internal structural problems and overexpansion, while mom-and-pop restaurants are also struggling to stay afloat. "You either need to have good quality, good prices or good location," said Fabio Faerman, who is handling the Pilos Tacos listing. "If you don't have one of those, the market won't support it."

    Restaurant landlords are taking advantage of the situation by charging higher rents and asking for key money, which can be a significant upfront payment to take over a fully built-out space. In some cases, landlords will also ask for key money on top of charging market price rent.

    "It's a little harder for a restaurateur to swallow," said Alex Karakhanian, principal of Lndmrk Development. "But it's a way for property owners to make up for the losses they've taken when tenants leave."

    Despite the challenges, there is still consistent demand from prospective operators willing to pay key money and high rents to take over fully built-out spaces.