The Real Deal New York

The end of NYC’s restaurant renaissance could be near

Neighborhoods have gentrified during the course of some eateries' leases, pricing them out
July 29, 2014 06:10PM

What do Bobby Flay’s Mesa Grill, Keith McNally’s Pastis, Wylie Dufresne’s wd~50 and Danny Meyers’s Union Square Cafe have in common? All are game-changing restaurants that have either closed or are on their way to the chopping block.

The shuttering of some of New York’s favorite eateries that opened in the late 90s and early oughts signals a sea change in the city’s food landscape, according to the Village Voice. The newspaper boils it down to simple math: many of the new wave of dining spots typically signed 10-year leases with five-years options. So restaurants that benefitted from a down market between 1999 and 2004 will soon fall prey to today’s rising real estate prices, if they haven’t already.

Now, the more natural tenants of large midblock commercial spaces with attractive frontage will likely take over such spots occupied by restaurants in then-gentrifying neighborhoods, such as the Flatiron District and Union Square. Those tenants are banks and retail stores, Faith Consolo of Douglas Elliman told the newspaper. [The Village Voice]Tom DiChristopher

  • Crian Bashman

    This is a significant reason as to why so many folks are choosing Brooklyn, Queens and upper Manhattan over the traditional “Manhattan” market. People want interesting restaurants and retail, not banks closed by 6pm and chain coffee and frozen yogurt shops. Institutional money doesn’t get that and unfortunately now that institutional money is going big in Brooklyn, expect the same sort of thing to happen. The only saving grace for Brooklyn is most of the retail spaces in existing buildings aren’t large enough for “credit” tenants. I’ve heard enough out of the execs of the big PE firms and they just don’t get it, nor do I expect them to get it as their reputations proceed them.

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  • truthordare

    Union Square cafe is a unique situation. If Danny Meyer expects to be on that corner of union square, he should expect to pay rent. If he moved in mid block, his rent would be half. He just wants the panache.