Now re-opened as a hookah lounge, Rendez Vous sits next to South U. Pizza and Oasis Mediterranean Grill, owner Nizar El Awar's other South University businesses.

Ben Freed | AnnArbor.com

The former restaurant has combined with the upstairs Smoka Hookah hookah lounge and re-emerged as soley focused on the Middle Eastern water pipe. El Awar said the changing face of South University forced his hand in the decision.

“When I opened Rendez Vous there were maybe 10 to 12 restaurants in this three block area,” he said.

“Now there are over 30 in the same area. So I have three restaurants right next to each other and they are competing with each other and with all of the newer places also.”

Another restaurant, Burger Fi, plans to open on the corner of South University and South Forest sometime this fall in a space that has previously been a coney island, New York Pizza Depot and most recently Sushiya Japanese restaurant.

South University Area Association executive director Maggie Ladd told AnnArbor.com earlier this summer that she has also noticed a change in the makeup of the area.

As new developments such as Zaragon and Landmark have brought a higher concentration of students to the neighborhood, Ladd said she sees a market for more non-restaurants to flourish.

"Not just diversity of housing, but diversity of businesses," she said. "And we think one will follow the other with new business spaces being available in the bottom of these new buildings."

El Awar agreed that there is more potential for non-restaurants to succeed with the current mix of businesses, but lamented the fact that he had to close the cafe.

“It’s a tough market now and I just had to make the decision. It’s a shame because it has a great history and I had many loyal customers,” he said.

“People come and they see a busy street and they don’t realize that it’s fairly limited customers, really the students are the only customers.”

El Awar also owns Oasis Mediterranean Grill and South U. Pizza, both located next to Rendez Vous. He said that due to regulations regarding food service and tobacco use, patrons at Rendez Vous would be able to make orders for delivery from the other two restaurants.

“We’re not allowed to serve food in a hookah lounge,” he said.

“So they can call in an order to one of the other restaurants and it can be delivered and they can pick it up.”

The Smoka Hookah tobacco shop across the street next to Ulrich’s bookstore, also previously owned by El Awar, has been absorbed by the new lounge. The space it occupied is currently vacant and has not been listed by any local Realtors.

The only other hookah lounge in Ann Arbor is the Smoke Station on Packard Road, which opened last year. A new lounge, Hail Hookah Lounge, had planned to open earlier this summer but is experiencing delays. According to the lounge’s Facebook page and a banner hanging in the window, a grand opening is “coming soon.”

El Awar said that business has been brisk at Rendez Vous since it reopened on August 18.

“Business has been very promising so far,” he said.

“We opened without any announcement or advertising. We really just opened the doors and people have been coming in. That’s even without all the students back already so it’s a good sign for us.”

There is still more remodeling to do on the upstairs lounge, but El Awar said he plans to complete those fixes without further closings. He hopes to rent out the former Smoka Hookah lounge as an events space for birthday parties and other events sponsored by local companies and campus groups.

Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Get in touch with Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2