Sacramento's restaurants are a clear reflection of the times, with high-end establishments taking a beating and fast food expected to continue to rise in 2010.

As the recession continues, top-tier central city restaurants such as 55 Degrees and Masons have closed or begun transforming into more affordable dining. Similarly high-end chains, such as Ruth's Chris Steak House, just outside the central city, and Morton's The Steakhouse, and celebrated local establishments are reported to be in trouble.

Casual restaurants have also been seriously hurt by the economy. But fast-food restaurants like McDonald's are expanding and the demand for "fast-casual" restaurant concepts is exploding.

"Everyone is shifting their focus to meeting the consumer where they're spending," said Garrick Brown, vice president of research for Colliers International's Sacramento office and the company's senior USA retail research director. "What's happening with restaurants in central Sacramento is the highest-end guys are all getting killed. It's pretty much across the board: Anything that's upscale has just been hammered."

People aren't dining at expensive restaurants, whether they're out for a good meal, traveling or doing business. Some higher-end restaurants and bars, which can pay $10,000 to $15,000 in rent each month, are having trouble making rent. Several more could close or undergo radical makeovers in the next year, property experts said.

"I think everyone's in survival mode right now," said Midtown Business Association President Aaron Zeff. "People are still losing jobs. The economy seems to be shrinking. Disposable income seems hard to find."

In 2010, restaurants with bars and those with good ratings from customers are expected to do better than others. Restaurants are said to be breaking even on food. Alcohol sales are keeping a lot of restaurants alive because the profit margin is higher, Brown said.

While many casual restaurants have been offering reduced meal prices or specials, such as two-for-one deals or three-course dinners for $20, now even high-end places like Ruth's Chris are doing so — which is unheard of, Brown said.

Around town, they'll continue that trend until the economy stabilizes, said Dave Herrera, a vice president with Colliers who specializes in central city properties.

Casual restaurants, the tier below high-end, are also hurting in 2010. Dragonfly Restaurant and G.V. Hurley's both closed in Midtown last year. Consumers have shifted to cheaper food, and there were too many casual restaurants, especially chains, Brown said.

New mom-and-pop restaurants — anything that's privately funded and most likely with only one owner — will be rare for the next year or two. Home equity loans, where most new restaurant owners get their start-up funds, are off the table. Bank failures are expected to accelerate, so commercial real estate loans and small business loans will dry up for local restaurants, Brown said.

Plus, demand for mom-and-pop retail spaces has shriveled. Where brokers had five or six potential customers vying for one space two years ago, they now are likely to have one customer for every three or four spaces that become vacant, Brown said.

At the same time, restaurants selling fast food and the next level up, "fast casual," are growing. Fast casual restaurants with unique concepts are soaring. Smashburger began in Denver as a single restaurant only two or three years ago. Now about 300 franchises have been sold. Smashburger and Five Guys Burgers and Fries of Arlington, Va., have been looking for space in the central city, he said.

"That's where all the action is coming from right now," Brown said.

Most of the currently vacant space previously housed small restaurants or mom-and-pop retail stores. With most vacant space in the central city limited to 5,000 square feet or less, big chains like McDonald's aren't likely to expand there. Those restaurants need free-standing buildings with drive throughs, Brown said.

Infill development may gradually begin to fill some of those vacancies in 2010 and beyond. But a challenge to redevelopment of those empty spaces is that most retailers who are expanding right now need more than 5,000 square feet, he said.

Retail space rents have dropped by as much as a third. Landlords who own upscale, street-level retail and restaurant space have had to lower rents for incoming tenants and renegotiate leases to keep existing tenants. Where rates were $2.25 to $3.50 per square foot in 2007 for spaces where tenants pay all expenses, known as triple net, they have dropped to $1 to $2.75 per square foot, Herrera said.

Oakland resident Julio Peix wants to open a tap house in Midtown. He looked at vacant spaces for a year and a half and said he was shocked to find the prices higher than San Francisco. He found spaces going for 85 cents to $1 per square foot in parts of San Francisco, such as Potrero Hill, while spaces in Midtown were going for $2.50 - $3.

"Midtown was just crazy," said Peix, who hasn't given up.

Still, new restaurants are opening in the central city. Two offering comfort food are 5th and H Café. which opened in November, and House, which replaced 55 Degrees at 555 Capitol Mall. Bistro Michel, Bull, Cafeteria 15L and Mayahuel Restaurant are opening, too, Herrera said.

Restaurants need to hang on, Brown said.

"I see things gradually improving, as far as consumer spending," he said. "But it's going to be very slow and Sacramento's going to lag (behind) the rest of the nation."