Scott Rechler’s RXR Realty is betting big on the shared commercial kitchen model.
The developer led a Pasadena-based remote kitchen startup’s $40 million funding round, which recently closed.
The company, Kitchen United, plans to use that Series B funding round to expand in New York, Boston, and San Francisco, according to the Los Angeles Business Journal. The company plans to open kitchens in some of RXR-owned properties. Kitchen United also has locations in Chicago, Austin, and Scottsdale, Arizona.
Remote or virtual kitchens provide shared spaces that are rented to pickup and delivery exclusive “restaurants,” with no physical dining space.
Last year, Uber founder Travis Kalanick made a splash when he bought Los Angeles-based virtual kitchen business CloudKitchen. Kalanick’s plan is to scoop up distressed real estate across the country and turn those locations into spaces for digital-age retail businesses and restaurants that don’t need physical storefronts.
The model is designed to tap demand from operators who want to lower expenses related to renting a full restaurant space, as well as growing consumer demand for food delivery services. Delivery sales are expected to reach $25 billion by 2023 from $18 billion in 2018, according to a study.
Kitchen United also offers a suite of technology services to restaurants that rent its kitchens. Restaurants operating out of its Pasadena location include Halal Guys Inc. and Wetzel’s Pretzels. The company signed a lease for its second L.A. location, at 152 W. Pico Boulevard in Downtown, in April. [LABJ] — Dennis Lynch