March 22, 2019

JF1662: Restaurant & Nightclub Entrepreneur Switches To Real Estate Investing with Tom Prakas


Tom and his company specialize in hospitality and restaurant brokerage. That’s where Tom built a career for many years before the long hours and his family made him want to make a change. With 30 years of restaurant and night club experience, Tom is the perfect partner for investors who are looking for restaurant deals. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!


Best Ever Tweet:

“You buy quality real estate and you’ll make a lot of money if you hold on” – Tom Prakas


Tom Prakas Real Estate Background:

  • Tom has 30 years experience in the restaurant, nightclub and sports bar industry
  • Has owned 27+ popular establishments throughout Ohio, Georgia and South Florida
  • He and his team have sold or leased over 400+ restaurants and commercial properties
  • Based in West Palm Beach, FL
  • Say hi to him at
  • Best Ever Book: Art of the Deal


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Joe Fairless:  Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff. With us today, Tom Prakas. How are you doing, Tom?

Tom Prakas: Great, how are you?

Joe Fairless: I am doing well, and looking forward to our conversation. Tom has over 30 years of experience in the restaurant, night club and sports bar industry. He and his team have sold at least over 400 restaurants and commercial properties. He’s owned over 27 popular establishments throughout Ohio, Georgia and South Florida, so I’m looking forward to our conversation. Tom, with that being said, do you wanna give the Best Ever listeners a  little bit more about your background and your current focus?

Tom Prakas: Yes. I grew up in the restaurant and night club industry by way of my parents, that are from Greece originally. My father and uncles are all in the restaurant business, so I followed in those footsteps and I went into more of the liquor business, in the late ’70s and early ’80s, when dance clubs and night clubs were big. I started opening up night clubs in Ohio, then I went to a couple cities in Ohio, then I moved to Atlanta, opened clubs in Atlanta, and ended up ultimately in the late 1980’s, early ’90s in South Florida, where I opened up other clubs. That was my first phase in my life. Now I’m a commercial real estate broker who specializes in hospitality and restaurant properties.

Joe Fairless: Got it. Very interesting. Previously you were opening up night clubs across the country… Did you own the real estate where the night club was located?

Tom Prakas: I had 28 of them total, so I did own multiple sites that I owned the real estate, but I would say at least 20 of them I was a tenant, and then I owned 7 or 8 of the properties that they were in.

Joe Fairless: Okay. Tell us about that business model.

Tom Prakas: Well, it was a little different age in the business. It was more in the days of the Studio 54 days, when the disco/night club business was big. There were big clubs. I just happened to get into that field, and had much success in that field with my places. I grew up mostly just a self-taught marketing guy, marketing my clubs and sports bars.

Joe Fairless: And when you were working on those projects — you now aren’t as focused on owning your own night clubs, clearly, because you said you have a different focus now… What did you do with those properties that you owned, and the ones that you were leasing?

Tom Prakas: Well, regrettably, I sold my last ones in South Florida in the mid ’90s, and then I transitioned into the real estate business. I took off a year, and as my wife says, I decided what I was gonna do when I grew up. And I got into the real estate end, meaning the hospitality end of it, I specialized. I was one of the first probably companies in South Florida that just did hospitality brokerage and real estate. That was my specialty.

Joe Fairless: And why did you sell them off?

Tom Prakas: Well, I sold them off because I really needed a change of lifestyle; when you’re younger, I was going from ten o’clock in the morning till six o’clock in the morning, going from nightclub to nightclub. At one time I had seven of them at one time, in one city… So it was definitely a draining business, and as my children grew older, I wanted to spend more time with my children.

Joe Fairless: That makes sense. That timeframe or those hours are not really sustainable for most people, I don’t imagine. So now you are focused on hospitality… Will you just describe a little bit more about your current focus?

Tom Prakas: Yes. When you go into a restaurant, a lounge, a club, a food hall – that’s what we do. We work for developers for restaurant groups, and we find their sites and we do all their real estate needs for those sites… Or we sell their businesses, meaning we sell clusters; say there’s  a chain that maybe has ten sports bars in an area. They will bring them to us and we will do the financial analysis on them, we’ll put a price on it and then we’ll market them for sale. We could sell them as a group, we sell individual restaurants, nightclubs, or we will do site selection for them. We have a division of our company, we have one person dedicated to just handling franchise operations all over Florida.

Joe Fairless: What’s one of your favorite projects you’ve worked on?

Tom Prakas: Well, one of my favorite projects — I’m working on a few really big restaurant projects now in South Florida, with a big real estate company here called Crocker Partners, and we’re helping even design, and we’re leasing and handling all the leasing for them for a project in Boca Raton called Restaurant Row, which is pretty exciting. It’s gonna be a five-unit restaurant property right next to a huge mall down here, the town center mall in Boca… And we’re working on their Citibank tower building in Miami, which is in the heart of the business district on Biscayne, and we’re bringing in a big restaurant from overseas from England; it’s a famous restaurant, and we’re bringing in to redo the 10,000 square feet of restaurant space there… And we’re working on a peer project – they’ve redone a 110 million dollar project in Pompano Beach; we’re the exclusive agents or brokers for the Pompano Pier project, which is exciting. It’s got many restaurants, properties on it, and it’s oceanfront, in South Florida.

Joe Fairless: What are your responsibilities for the Pier project?

Tom Prakas: We are the exclusive leasing agents, meaning we are hired to find, negotiate the leases, bring them deals, bring them letter of intents to enter into leases for that project. There’s probably gonna be a combinative total of maybe eight to ten restaurants, plus retail down there. We’re handling the whole project.

Joe Fairless: Let’s pretend you just signed that contract to be the exclusive leasing agents for the project… Now what do you do in order to fulfill your obligation or your commitment to get the restaurants and the retail in?

Tom Prakas: Well, now our job is to do what we said we are gonna do and marked off to do. Now we’ve gotta fill it and bring them leases that they approve, in their square footage price range. Now we bring the tenants.

We have a proprietary database of over 8,000 restaurateurs, restaurant groups, restaurant development companies really all over the world that we get out to. Then what we do is we put together a marketing plan. It’s not residential, but we do the same thing – we put together a marketing plan, let’s say for a luxury property. We do it for the restaurant site, and then we get it out to our database, and (I call it) the hot leads that we have. We have about 10-20 big restaurant groups that are always looking with us for South Florida… So it’s our job to get this out to the public — or not to the public, but to the right crowd, which is the restaurant development groups, and bring a lease on the property.

Joe Fairless: Sure, yeah. The end result – getting the lease. And when you do the marketing plan, when you come up with the marketing plan, what are some questions you ask yourself in order to determine what areas you should focus on to highlight when you’re marketing the project?

Tom Prakas: Well, every project is different. We have urban projects, we have rural projects, we have suburb projects, we have projects like this that are on the oceanfront, which are very rare. This is probably one of maybe a couple spaces left on the ocean in South Florida that you can do this kind of project of this kind of magnitude… So what we try to do is pick out the high points of what we’re marketing, meaning is it an urban area where the office drives the lunch business, or the happy hour business, or the dinner business… Is it like South Beach in Miami? Is it a high concentration of condos and millennials? That’s who we would reach out to as far as the restaurateurs or the lounge operators go. Or is it a bedroom community or a suburb where it’s more family-oriented? So that’s our task – to know and reach out to the right restaurant groups to take the space.

Joe Fairless: And it sounds like one differentiating feature that you all have is the proprietary database of a bunch of restaurant companies and developers across the world… Is that something that you created from scratch, or did you purchase that?

Tom Prakas: No, it’s something that I created. I started the company 19 years ago, so it’s something that I’ve built up over the years. Of course, when I started, there was hardly an internet and there was hardly a database or e-mail systems… But we’ve collected them and gathered them for the last 19 years, and it is proprietary. Our company is a  lot different, because anybody working with us has had restaurant experience. We don’t hire anybody that hasn’t been in the hospitality industry, because it’s very specialized.

Joe Fairless: What is a challenge that you’ve come across recently, maybe a story of a challenging project or something, other than what we’ve talked about already?

Tom Prakas: Well, of course we have a lot of demanding clients that give us their properties, and some of them are very expensive projects. The Pier is a 110 million dollar project. When they put that trust in your hands, of leasing it out, there’s a lot of going back and forth with the developers and things that you really have to perform and you have to be accountable and give leasing reports. We have to be very diligent in our work as far as bringing clients, and then we have to also prove how we’re doing it, and who we’re bringing, where, when.

Probably one of my most challenging deals recently has been the space that I said, the tower in Miami. My landlord needed a very, very high-end, unique — and they turned down many, many deals that I brought to the table that were very good restaurants, that most developers would have said “Great! This is great!” These developers wanted to — we call it monetize the building, and they wanted something when they lease their office space (it’s a million square foot building) they want a world-class restaurant in there… So it becomes tougher to do as the demands get higher.

Joe Fairless: So you as a broker, you get paid to get the transaction done, and then you’ve submitted a lot of different options to your client, and they said “Meh, not unique enough… Not unique enough… Not world-class enough…” How do you attract the world-class restaurant and still get the price that you want for it, when in reality you really need this lead to convert? So it’s not having as much negotiating power as perhaps you would if there were a whole lot of options.

Tom Prakas: Yeah, it’s very specific in this market. Like I said, it’s a really — when they say “boutique brokerage” – we’re definitely a boutique brokerage… And by that, I have to give a lot of guidance too to the developers. A lot of developers come to us that have commercial real estate, and they have a restaurants space let’s say, and they really don’t know what it takes to build a restaurant out, let’s say. They don’t know that it’s a multi million dollars buildout for a space; they don’t realize sometimes how much renovation they have to give it, and what kind of — we call it TI dollars (tenant improvement dollars) they’re gonna have to give to land the right tenant, to monetize the building… So that’s where our expertise comes in, and that’s why we have connections with (I’d say) most — I mean, there’s thousands of restaurant groups, but we do have connections with hundreds and thousands of restaurant groups that we try to match up to a property. That’s our expertise.

Joe Fairless: And you mentioned some of the nuts and bolts of the actual negotiation process… Will you elaborate on the main components that are negotiated on a lease with that type of client and that type of customer?

Tom Prakas: You mean to kind of go through the lease?

Joe Fairless: Yeah, I worded that poorly… Basically, what are the different things that are negotiated between the world-class restaurant and your client in order to come to an agreement?

Tom Prakas: Well, there’s the term, of course; most restaurateurs want a long-term lease, because they’re putting such a large investment in. So it’s the term of the lease (the length), and then it’s of course the terms of the lease, meaning the per-square-foot value of the lease, what they’re gonna pay per square foot. There’s other caveats to those leases, meaning there’s also passthroughs, or (they call it) [unintelligible [00:14:37].19] in some areas, but they’re really passthroughs… How much the real estate tax is, the building insurance for their share of the spaces – those add up also to big dollars.

Let’s just say the rent is $100/square foot; the passthroughs may come in at another $25 to $30/square foot on a space…

Joe Fairless: Oh, wow.

Tom Prakas: …so that has to be dealt with and that has to be relayed to the client, meaning the restaurateur. What you have to do – first of all, you have to put together a good package, meaning you have to put together demographics, everything at their fingertips. What we try to do is put together a package that’s not only pretty pictures, but captures the real demographics. And we have some proprietary and some commercial applications for commercial real estate that we can just zoom in; we can pull up anything within a 1, 3, 5-mile radius; we can get not only your demographics, but we can pull up every restaurant, every cafe in that zone. We can give the client a wealth of information about the site that we’re trying to interest them in.

Then it’s our job too, of course, to move out to the right tenants. If I know we have a landlord who wants a specific kind of use… If he says, “I want high-end stakehouse/seafood”, well of course we’re not gonna put it out to ice cream parlors and Italian restaurants; we’re gonna go search the biggest steakhouse/seafood companies, restaurant groups in the country. We’re gonna reach out to them with a specific marketing plan that’s gonna give them all the info at their touch that they need to make a decision.

Joe Fairless: For Best Ever listeners who have the space that you describe, and are looking to find tenants and hire a broker who does what you do, what type of fees are typically charged by a group like yours to engage in a project?

Tom Prakas: Well, we have a standard fee; we get 6% of the base rent for the first term, meaning up to ten years, or a 5% if we do it in-house. What we offer our clients mostly is 5% in-house of the base rent – not the passthroughs, but the base rent for the first ten years, or 6% if we have to co-broker, and then we would split with the co-broker… Because a lot of deals are brought in with other companies, if restaurants have brokers that they use or they have associations with, from New York and Philly and New Jersey, that we deal with all the time.

Joe Fairless: And when you take a look at this business relative to other types of businesses — because from my experience, I haven’t interviewed a whole lot of brokers who are focused on what you’re focused on… Why do you think there aren’t as many focused on what  you do, versus apartment brokers, or office, or just residential?

Tom Prakas: Well, because this is a smaller segment of the commercial real estate market… Even though when I started, 20 years ago, when you would go to a retail client or a developer of a mall, they would say “Oh, restaurants – they create trash, they smell… We don’t want them. We’ll put one in the back of the parking lot.” Today, a restaurant has become a very dominant part of retail, meaning they depend on the restaurants to drive the traffic to their malls, to their shopping centers, whatever. So I just happened to luck out; it took 20 years to get lucky, but it finally ended up to where we came to the forefront of the retail market.

But in the world there’s so much more office space. There’s billions of square feet of office space in the United States, compared to maybe millions of square feet of restaurant space or maybe 100 million square feet.

So just from the standpoint of scale, you’re not gonna find 20 restaurant brokers in Florida, you may find three or four. You may find five or six or seven in New York City. When I say “restaurant/hospitality brokers”, that’s really 90% of our emphasis. That’s why I say we’re very specialized.

Joe Fairless: Yes, you are, and I’ve thoroughly enjoyed our conversation. Based on your experience as being in the real estate industry and being highly focused in what you’re doing, what is your best advice ever for real estate investors?

Tom Prakas: For real estate investors – I’m an investor also. I buy properties, with partners and myself my best advice is buy prime real estate. I know that’s an old cliché, “Location, location, location”, but buy prime real estate that will suffice/handle the debt service, if you have to have debt service on it (if you don’t buy it cash), and then just hold that property… Because property historically, if you look over the last 200 years, has gone — not a meteoric, straight rise up, but it’s gone up, up, up. And what I tell people is it’s kind of like the Warren Buffet method of stocks – buy quality stocks and hold them for 20-30 years and you’ll make a lot of money; you buy quality real estate and you’ll make a lot of money if you hold on to it.

There will be bad times and you’ll have vacancy, or you may lose tenants, but if you hold off in the long haul, if you take a 10-year span or a 20-year span, mostly (95% of the time) you’ll end up way ahead of the game. That’s my best advice to a real estate investor.

Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?

Tom Prakas: Ready.

Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.

Break: [00:20:02].04] to [00:21:00].25]

Joe Fairless: Okay, best ever book you’ve recently read?

Tom Prakas: Best ever book, I have to say, Art Of The Deal.

Joe Fairless: What’s a mistake you’ve made on a transaction?

Tom Prakas: Many. [laughs] I made a mistake by selling my properties when I moved from Ohio. I had a lot of rental properties, commercial properties… I thought I was a genius then – I was 35 years younger – and I sold them all, and made a nice profit off of them, but if I would have kept them, I look back now, it would have been a quantum leap ahead of where I was from selling them.

Joe Fairless: I’m assuming based on that response you did not 1031 those properties into something else…

Tom Prakas: Well, I did 1031 a couple, I didn’t 1031 them all… Because I had a lot of properties in Ohio. I had probably 15-20 properties – rental properties, commercial buildings. I paid my gains tax and I invested again in other stuff, in other businesses… And like I say, that’s my biggest regret in real estate, but it was 35 years ago, so…

Joe Fairless: What’s the best ever deal you’ve done that we have not talked about already?

Tom Prakas: When you say “best ever deal” – for my personal  portfolio I bought a building years ago in a South Florida area, in a town with a partner of mine, and we made a lot of money on it without a lot of money invested… I could say that’s probably my favorite kind of deal to talk about, was the low entry and the high exit. Then we did 1031 that deal into another couple properties… But that was my best.

And my worst – I don’t know if on the Lightning Round you have a worst story, but…

Joe Fairless: Yeah, please tell.

Tom Prakas: My biggest real estate mistake was on a property called the Waldorf Towers in South Florida, in Miami, on Ocean Drive. Famous building. When they pan on Super Bowl, when they’re in Miami, you’ll see this building at 8th and Ocean. It’s a 66-room hotel, with a neon tower… It’s famous, it’s called the Waldorf Towers. It’s still called the Waldorf Towers. My partner and I had nightclubs down here in South Florida in the late ’80s… My partner and I went to look at it and we had the contract ready for us to buy it, and the big price tag was — I know this is gonna sound weird, but it was $375,000. It was a 66-room hotel on the ocean, in South Beach, at Main and Main. My partner said “This area looks a little seedy…” And it’s true, it was. It wasn’t what it is now. And I passed on it. I went back and I thought, “You know what, I’ll find another deal.”

Fast-forward 25-30 years later, from the income that they made – the guys bought it for 375k; they bought four other hotels down there, by the way… They sold that for 56 million dollars.

Joe Fairless: [laughs] Just that one, or all four?

Tom Prakas: Just the one. That’s what their cashflow was over the years they had it, and then they sold it for like 27 million. That’s why you shouldn’t have me on the show; I’m probably the dumbest real estate guy in the world… But at least your viewers can learn from that.

Joe Fairless: So if presented a similar project, where it’s not in the best area, how do you qualify that now, knowing what you learned those years ago? If presented something similar, but obviously not the exact same thing.

Tom Prakas: It’s in the timeframe. In that timeframe, those hotels were going for 375k to 550k down there, and now they’re going for 30-40 million dollars. It’s a fact. It was a while, 25 years, and I’m telling you that real estate appreciates… But that’s a dramatic example of real estate. You’re not gonna buy a building in Cedar Rapids, Iowa, a warehouse building that’s gonna go up to 50 million dollars from 375k, but I can tell you that even in bad zones, I can tell you there’s new opportunity real estate zones, there’s gonna be a lot of opportunity there for people to make money, and for developers to come in and make money… I know guys in New York that bought 20 years ago in Brooklyn and  Bronx and Harlem, and their properties have gone up 12-15 times since then.

I think real estate overall is a great investment for somebody that wants to hold it and isn’t anxious to trade. It’s not a stock where you can sell it the next day.

Joe Fairless: How can the Best Ever listeners learn more about what you’ve got going on?

Tom Prakas: They can go to our website at, they can call me at my cell number, they can call the office, they can Instagram, Facebook us at Prakas Company. They can call our offices, 561-368-0003. They can call my cell, 561-929-0111.

Joe Fairless: Tom, I thoroughly enjoyed our conversation. I learned a lot. I loved hearing about your background, your approach to the business of hospitality and brokerage and how you think about matching up the clients and the customers that you’re ultimately seeking for your clients, as well as the misses and the hits that you’ve got along the way… So thanks so much for being on the show. I hope you have a best ever day, and we’ll talk to you again soon.

Tom Prakas: Thanks, Joe. Thank you. 

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