Like a truly recession-weary New Yorker, this year restaurant mogul Steve Hanson has opted to swap foie gras for burgers and fries.
In January, Hanson, founder of the B.R. Guest restaurant empire, stunned foodies by shutting down his three-star Italian gem Fiamma, a Soho spot famous for its $92 prix fixe menu laden with indulgent foods like foie gras and quail eggs.
In published reports, Hanson blamed the recession’s decimation of Wall Streeters’ dining dollars.
Now he’s firing up the grill for a far more modest American culinary staple: burgers.
Hanson has leased the former home of barbeque joint the Hog Pit at 22 Ninth Avenue at 13th Street in the Meatpacking District for Bill’s Bar & Burger. It’s slated to open later this month, serving up turkey burgers and perhaps even spiked milkshakes.
Bill’s is just one of the new burger joints getting ready to compete in the burgeoning New York burger wars.
In the last six months alone, roughly a dozen local burger deals have been inked. The new Manhattan meat market spans organic, grass-fed and free-range beef burgers. It includes a New York outpost of Virginia-based chain Elevation Burger, scheduled to open this winter, and new outposts of chains Five Guys, Goodburger and Lucky’s Famous. Even Katie Lee Joel, recently split from her famous rocker husband Billy Joel, is reportedly opening a burger place named for her 2008 NY Burger Bash-Award winning Logan County burger.
“There’s no question it’s increasing. When things are rough, comfort food sales are up, and burgers are comfort food,” said Faye Fisher of Advance Restaurant Finance, which is bankrolling several new burger joints in New York. “Basically, who is doing really well right now? It’s the moderate-priced restaurants, and what’s more moderately priced than a burger?”
Many more meateries are in the offing. Executives at the restaurant development firm BCD are scouring Midtown for Five Guys Burgers and Fries, which plans to add three Manhattan outposts by 2010 to its current roster of nearly a dozen New York City locations.
Celebrity-magnet Pop Burger, where actors Billy Crudup and Sarah Jessica Parker have been spotted, is said to be on the lookout for more space after scoring hits with two swanky Manhattan locations. A spokesman for the company confirms Pop Burger is negotiating for a deal in the megamall/entertainment complex Xanadu, now under construction in the new Meadowlands Sports Complex in New Jersey.
Meanwhile, a source told The Real Deal that Tishman Speyer is seeking a burger place to fill a perceived culinary gap in the concourse level at Rockefeller Center. The word is kosher deli Mendy’s will move upstairs to make way. A spokesperson for Tishman declined to comment.
In fact, so many burgers are hitting the grill here, some real estate insiders fear the trend is overheating. While burgers may be cheaper than the $20 lunches New Yorkers might have been buying before the recession, the success of a new restaurant, no matter what type, is far from guaranteed in this economy.
“It’s still $12 to $14 to get a burger and then something to go with it as well, and [not everybody] can do that,” said Alan Fleischman, a former restaurateur and licensed real estate broker who now runs consulting firm Restaurant Development Associates in Manhattan.
While customers are looking for a quick, cheap bite, companies looking to do a deal for a burger joint face an added expense many retailers never confront: All of that grease needs to be vented, limiting lease deals to either spaces with vents or room to install them.
Spencer Levy, director of hospitality for Robert K. Futterman, said venting with grease hoods can add $5,000 per story, while an alternative method, a hydrostatic precipitator to clean the air, can cost $125,000 to $175,000, not including maintenance.
Still, in a tough economy, restaurateurs see profits in patties, and landlords who might have shunned food tenants during the good economy are looking for proven performers. A burger place can serve up to three times as many customers in the same time as a more high-end slow-food restaurant.
“It’s not that landlords are dying to have a burger tenant per se, but what they want is a tenant who can pay the rent, who they feel has a good business plan in this economy,” said Peter Braus, executive vice president at Sierra Realty Corp. He represented the landlord in a 2007 deal for Five Guys at 45 West 55th Street, its first Manhattan location, and Lucky’s in a deal earlier this year for a site at 264 West 23rd Street that recently opened.
Andrew Moger, president of BCD, who represents a Five Guys franchisee operating in Manhattan, said the chain is aggressively expanding, looking between 34th and 57th streets and Third to Ninth avenues, and in Union Square and on Wall Street. Five Guys has a site under construction at Third Avenue and 43rd Street, he said.
At press time, Moger was negotiating letters of intent for five transactions for Five Guys. He said landlords were offering as much as six months’ free rent and as little as two months’ security deposit.
“Obviously we have more flexibility from landlords now that Five Guys is a proven operator,” said Moger.