In vino veritas, the old, old saying goes, and as wine bars begin to dot a range of New York neighborhoods, landlords are perfecting their own variation on the proverb. Call it in vino prosperitas.
Wine bars, long a staple of Italian cities, where they’re known as enotecas, provide urban landlords an alternative to conventional retail and bar tenants. While nightclubs and conventional bars can command higher rents, the sophisticated slant of these refined watering holes cuts down on much of the wear and tear that comes with more conventional nighttime businesses, and can have a broader impact on the neighborhood, real estate professionals say.
Wine bars got their U.S. foothold in where else? Californian wine country, and as Americans embrace oenophilia, city landlords are finding them to be desirable upscale tenants that fill retail space that might otherwise have been bank branches or gourmet delicatessens. The distinction can be a fine one between wine bars, restaurants that showcase wines, and stores that sell them but retail real estate agents agree that wine-related businesses are finding fertile ground in New York.
“We’re excited to have the wine bar coming,” said Greg Smith, executive vice president of JRT Realty Group Inc. and landlord representative for the Teachers Insurance and Annuity Association. “This use seemed very appropriate.”
The association leased about 1,800 square feet of space at 780 Third Avenue, off 48th Street, this spring to Ribot, a Mediterranean restaurant with an encyclopedic wine list, which almost qualifies as a wine bar.
“Definitely there’s a movement towards higher-end wine retail establishments,” said Shawn Cho, an executive director at Dumann Realty, who recently placed a wine-bar tenant at 211 West Broadway in Tribeca. “We represent two wine stores currently, and they’re looking very aggressively in Tribeca, Soho and Nolita.”
Ribot plans to open another restaurant in another part of the city that will offer 500 vintages, and a few spicy menu offerings to take the edge off the wine buzz.
“Most people, when they’re drinking wine, they really don’t want to drink it by itself,” said Ratha Chau, a managing partner of Ribot.
The wine bar leased its Midtown East space for well over $100 a foot and required a kitchen installation for its operation, but needed a more limited cooking space than a conventional restaurant. That’s the two-endedécorkscrew of the business the overhead on a wine bar is lower, but so is the return. “For wine bars, the rent has to be really good,” Chau said. “Because I wouldn’t say there’s huge foot traffic that will stop by to have a glass of wine. It’s still obscure to the majority of people out there.”
Ribot will take advantage of a large outdoor plaza for seating, but it will be a bit different from a typical bar, Smith said.
“If it’s a wine bar, it’s more of a sedate crowd,” he said. “The hors d’oeuvres are more extensive and expensive. And it doesn’t stay open as late.”
Wine bars are finding their way into many neighborhoods, especially those with substantial foot traffic and large residential populations. Bar Veloce is a true wine bar that has two locations in Manhattan, one at 176 Seventh Avenue in Chelsea and the other at 175 Second Avenue in the East Village.
A third location in Soho recently converted from an Italian wine bar to a bar that sells sushi with its libations, called Bar Sasa. That’s a local adaptation well suited to New York, pairing wine with the many accessible ethnic cuisines.
“It’s an excellent time to get into wine in the United States,” said Jay Donayre, co-principal of the newly-opened VinoVino wine bar at 211 West Broadway in Tribeca. “The American palette is changing in good ways. The average American is not happy to just order merlot.”
Donayre, along with his wife, Ashley, is a true oenophile but a fledgling retailer. Still, his enthusiasm and detailed business plan sold the landlords at 211 West Broadway on the merits of a wine bar to be combined with a comprehensively-stocked wine store.
That landlord, who had a prime retail space with high ceilings and no columns, was not looking for a bar tenant, said representative Mark Kapnick, senior director of Robert K. Futterman & Associates, LLC.
Especially not a bar tenant with no retail background.
“This was a start-up, and landlords are always concerned about start-ups,” Kapnick said. “But the tenant came in with a very exciting business plan, and the landlord thought it was worthy to give them a shot.”
Before bringing in the Donayres, Kapnick showed the space to supermodel Christy Turlington for a potential yoga clothing studio, along with some retailers in antiques and home furnishings. Art gallery owners also checked out the space.
With that level of competing interest, the landlord could have hiked up rents, as most landlords tend to do for nightclubs and bars. But Kapnick said that while the asking rent was over $80 a square foot, the rent agreed upon was on par with other retail rents in Tribeca, which range from $65 to $85 a foot.
Donayre said he chose Tribeca as a location because it already had some wine retail.
The rent for the 4,270-square-foot space, in which about 1,650 square feet is usable for retail (the bar will use 942 square feet, the store another 700) is about 15 to 20 percent of anticipated net profit, Donayre said.
The wine bar part of the space is expected to gross about $376 per square foot in the first year of operation, which will grow to $456 per square foot a year by the third year, he said.
That return is about a third of what Donayre expects to reap from the wine store portion of his shop. But he is convinced that a wine bar, where he will hold tastings and educational events, is a necessary complement to the store.
“Our landlord is a big fan of the concept,” he said. “He sees this as an improvement to the neighborhood and the surrounding area.”