ABOUT THE CLIENT AND THE PROJECT
The American Junkie Restaurant (formerly Sangria) on Pier Ave. in Hermosa beach has been one of the busiest restaurant/ bar locations in the South Bay for almost 20 years. We represented a Midwest restaurant group who was trying to break into the Los Angeles Restaurant market but wanted to be in very high traffic beach communities. We pursued many opportunities but nothing was quite the right fit. We personally knew the owners of Sangria in Hermosa Beach from their various food ventures in Manhattan Beach, Hermosa Beach, and Redondo Beach. We also knew them socially after living in the same community for 25 years. They had no interest in selling their restaurant which was very profitable and was located in one of the hottest night spots in all of Los Angeles, lower Pier Ave. in Hermosa Beach. We continued to pursue them despite their continual rebuffs.
A fully fixturized restaurant/bar of 5,000 square feet of which 2,000 square feet was a covered patio.
Despite their continued lack of interest in selling, we finally asked them “what number would you sell for?” They threw out what they thought was a “pie in the sky” number. Our buyer responded very quickly and got within 10% of that number and we had a deal. It was a very tricky transaction because the city was not allowing new restaurants to open without a very long acceptance process. We worked out an installment sale of the business where it was just a split of new ownership initially and later our buyer would buy the smaller portions so as not to raise concerns with the city.
It was a “win win” because the city got along very well with the original Sangria group and since they were still partial owners it made for a very easy and amiable transition. The seller’s short term minority ownership also aided in the transition with the local community and with the various vendors. The transaction would never have happened without the 20+ year relationship with the Selling side and the creative deal structure to satisfy the city of Hermosa Beach’s on going tightening of new restaurant/ bar ventures.