The landscape of the New York City restaurant market has changed drastically over the last three years, not only with regard to the concepts entering and expanding in the market but also in terms of the site locations and configurations they are willing to consider. As more health-conscious eateries and smaller spaces become to norm, the NYC restaurant market is literally becoming a survival of the fittest.
The general population today is made up of a more educated consumer when it comes to of eating healthy, quality foods and monitoring how foods are processed. Going back a few years ago, cupcakes and yogurt were the most active concepts, acquiring high-profile spaces across Manhattan. However, thanks to a shift from sweet and savory to a more balanced lifestyle, concepts like Pinkberry, Crumbs and countless others have either closed completely or significantly pared down the number of storefronts they operate. In their place, you'll find salad concepts, juice concepts and organic produce-focused quick-service restaurants that are tailored to today's more health-oriented audience. There are large operators like Just Salad, Sweetgreen, Liquiteria, Organic Avenue and Juice Press popping up all over town, with smaller concepts like Fuel, The Little Beet and Dig Inn hot on their heels. Even pre-existing operators like Pax have had to adapt their concepts to a changing market by rebranding and relaunching themselves as Roast and Fresh & Co.
Although there is always a "next big thing" waiting around the corner, I feel that the health-oriented concepts are here to stay as they have become part of people's lifestyle. From a landlord perspective, they are presumed as a safer bet than a one-hit wonder because they are not seasonally focused and they appeal to a wide demographic, both male and female. However, it is becoming harder and harder to find a happy medium in locating a space where tenants can install their concept in full and still monetize the space enough to become profitable. Real estate values are infinite, whereas restaurants' ability to monetize a space is finite. Prospective restaurants can only fit a certain number of seats, turn the tables over a certain number of times and only charge so much for a salad or a glass of juice.
As such, both operators and brokers have to be more creative with configurations and site selection to maintain the ability to harness a market with as little financial exposure as possible. Side streets that offer visibility, especially in dense corridors like Midtown, are getting a greater frequency of looks and even concepts that offer full waiter service have learned to modify their installations to a more compact format to fit within smaller spaces and not pay as much rent.
As brokers, we must continue to be engaged with today's market and advise our clients on how to best adapt to a changing retail landscape.
Josh Siegelman is a licensed salesperson at Winick Realty Group LLC, New York, N.Y. Tags: