Subway and Demographics
Real estate developers and investors play a different role and it will be a costly mistake if one confuses their role for the other. One of the developer’s job is to search for a vacant land or property to invest a set capital into that project. Once the due diligence is complete, they get the ‘go’ and start with their project. One of the investor’s job is to determine whether to invest their capital and calculate to see if they will earn above market value return on their investment. But if not, they move unto another project.
A few weeks ago, my brother contacted Subway to see whether this one location was a good candidate for the restaurant. But despite the heavy car traffic and attractive location, the Subway development firm rejected our proposal. Their excuse was short and simple: the demographic was not desirable.
I immediately sent off the e-mail reply but no response. Even if I do my own demographic research, I can’t possibly win over their decisions. The developers has the data and resource to calculate and determine whether the proposed location is feasible candidate for the restaurant. The developers gone down their due diligence check list and noticed that the location did not qualify for all the check boxes. Oh well. So in this case, the investors need to move unto another project even though the ROI was higher than the average return.