Drive-thru restaurants are one of the biggest trends in real estate right now, and developers and investors are clamoring for more

Drive-thru restaurants are one of the biggest trends in real estate right now, and developers and investors are clamoring for more

Article Originally Posted By PhoenixBusinessJournal On March 17, 2022

What started as a place to grab street tacos in Old Town Scottsdale, catering to the bar crowds, is turning into something where suburbanites can order the food from their cars.

Mesquite Fresh Street Mex – formerly known as Mr. Mesquite Taqueria – is expanding its 7-year-old brand across the Valley, but instead of attracting walk-up customers late at night with the alluring smell of meat cooking over mesquite coals, it will be trying to get as many customers as it can through its drive-thru lanes. The company is hoping to open 10 drive-thru only locations across the metro Phoenix in the next two years.

“People are on the go nowadays – a lot more than ever. People want quick. People want fresh,” said Ahmad Alatrash, the co-founder of Mesquite Fresh Street Mex. “So how do you combine all that and put it in one concept? That is what we are trying right now.”

Mesquite isn’t the only restaurant company that sees a profitable future in drive-thrus – the concept is one of the hottest real estate trends in the food-and-beverage world. Operators are seeking ways to incorporate drive-thrus into their business models and real estate investors from all over the country are buying up drive-thru properties around Phoenix as fast as they can.

“Given the shutdown (in 2020), all your traditional sit-down restaurants have realized it is important to modify their prototype to where they have a drive-thru component as well,” said Chris Lind, a senior vice president of investments at real estate firm Marcus & Millichap. “Anyone who doesn’t have a drive-thru now, if that is not in their plans for the future, you likely won’t be hearing about them for much longer.”

Making dine-in obsolete

Mesquite’s owners started looking at adding a drive-thru back in 2019. Alatrash said the company wanted to experiment with the idea at a new location in Gilbert on Gilbert and Williams Field roads. When it opened in 2020, Alatrash said they soon realized that the drive-thru was more popular than the dining room at that location.

“When you have a drive-thru, dine-in becomes obsolete,” Alatrash said. “The majority of our business is at the drive-thru in that location.”

With that in mind, Alatrash said the company started looking at developing drive-thru only locations. He studied how places such as Dutch Bros and Salad and Go found success and even sought out the developers who worked with those companies. Mesquite Fresh Street Mex will be debuting its drive-thru only concept in March in Gilbert at 4875 S. Val Vista Drive. 

Overall, at about 1,200 square feet, the new drive-thru only location will be smaller than some other Mesquite Fresh locations, but Alatrash said with it being all kitchen space, it is one of his biggest locations.