Restaurant, Retail Spots at Hyatt Centric Downtown Sacramento Up for Lease

Restaurant, bar and shell retail space at the Hyatt Centric Downtown Sacramento hotel are available for lease, suggesting ongoing struggles for downtown merchants.

Turton Commercial Real Estate is listing lease opportunities for the current 7th Street Standard restaurant and Clayton Club nightspot, as well as 840 square feet near the hotel’s lobby envisioned for a retail use.

“What we’re seeing, and it’s not just in Sacramento, is hotel owners and operators are separating themselves from food and beverage operation,” said Scott Kingston, a senior vice president with Turton Commercial who’s listing the spaces. “They want to bring in a third-party tenant who can come in and bring it up a notch.

Kingston declined to comment on whether the move is entirely a matter of costs, but said hotel operators have to balance providing a great experience for hotels guests and making concepts like an in-house restaurant a profit center.

Hyatt Centric’s ownership with Presidio Companies for the hotel at 1122 Seventh St. operates both the restaurant and bar now, while the retail possibility is currently shell space.

Clayton Club, on the hotel’s sixth floor with a rooftop deck facing south, is 2,851 square feet, while 7th Street Standard is 4,364 square feet.

Since going live earlier this week, the listing has gotten some early attention, with the possibility of one operator taking over both the bar and restaurant spaces, Kingston said, or being operated by separate groups. Most likely, new lessees would bring new concepts rather than keep 7th Street Standard and Clayton Club, he added.

The latter is meant to have a speakeasy/jazz club feel that calls back to the heyday of the Hotel Marshall, which operated at the same corner of Seventh and L streets a century ago and whose exterior walls were incorporated into the 172-room Hyatt Centric.

Both businesses will continue operating until new leaseholders sign on.

Kingston said downtown retail and restaurant operators continue to face challenges, with Punch Bowl Social at the neighboring Downtown Commons complex disclosing its planed closure earlier this week.

An ongoing lack of foot traffic because of fewer office workers, along with negative perceptions about Downtown’s cleanliness and safety, are factors in those difficulties, he said.

On the other hand, second-generation bar and restaurant space is often in high demand and has a higher track record of success, because of both more approachable rents and fewer outlays for tenant improvements up front, Kingston said.

Along with Kingston, Kimio Bazett of Turton Commercial is listing the spaces.