Restaurant Feasibility Study in the Des Moines-West Des Moines, IA Metro Area

A restaurant market that tracks the nation

Des Moines-West Des Moines leads with the full-service restaurant, 1 of 39 by volume and, sorted against all metro and micro areas, the market comes in at 74 of 821 for restaurant loans. Over FY2017 to FY2026 the count reached 70 loans, worth $24.8 million, and a location quotient of 1.01x is almost exactly the national share, so the class here is neither unusually concentrated nor thin. What stands out instead is the ticket, a median of $227,100 that is 0.83x the national median for the class, which marks this as a lower-cost market for restaurant projects.

Iowa tickets, programs and lenders

Amounts in the middle half run from $86,250 to $446,250. Program mix: 7(a) for 64, 504 for 6, while franchise units form 8.6% of loans, a small slice compared with markets where brands dominate. On the 7(a) holder list, U.S. Bank, National Association shows 7 loans worth $342,900 and Lincoln Savings Bank shows 7 worth $2.4 million. TruBank, First Mid Bank & Trust, National Association and Northwest Bank (IA) hold 5 each, worth $2.0 million, $1.7 million and $995,500. Iowa lender figures are only SBA ledger entries; they judge no one. Polk County supplies 57 loans and Dallas County 7.

Few areas show such an even cadence. Approvals were 5 loans in FY2017 ($709,100), 6 in FY2018 ($695,000), 9 in FY2019 ($1.4 million), 7 in FY2020 ($3.6 million), 7 in FY2021 ($3.0 million), 8 in FY2022 ($4.2 million), 6 in FY2023 ($3.3 million), 6 in FY2024 ($2.3 million), 7 in FY2025 ($3.1 million) and 9 in FY2026 ($2.5 million). Cancellations after approval took 11.1% of the FY2017 through FY2024 approvals at minimum. Two further rates, the harsher cancellation variant and the charge-off rate, are held back, and a held-back rate is not zero. Each loan reaches this area through its project county on the July 2023 map.

Testing a Des Moines restaurant

A restaurant study for Des Moines should expect to prove a smaller project than the national picture suggests, since typical tickets here sit under the national median. That puts weight on occupancy cost, kitchen and equipment cost and a realistic seasonal sales curve for a Midwestern climate. The study has to show demand within the trade area from comparable restaurants, debt service coverage after rent and labor, and what happens if opening sales run below plan. Because most units are independent, the operator's own track record carries weight in how the numbers are read. The appraisal will test the same sales forecast, so the study should supply evidence it can use.