Perhaps it’s because New Yorkers are inveterate foodies. Maybe it’s all those late nights at neighborhood pubs fantasizing about the restaurants they will one day own. Or perhaps it’s the surge of laid-off bankers looking for new career paths.
For whatever reason, there has been a 25 percent jump in applications for new restaurant permits in New York City in the first three and a half months of 2009, as compared to the same period last year, according to preliminary data provided by the New York City Health Department. At the same time, rents on the storefront spaces ideal for restaurants continue to fall, according to a recent report issued by the Retail Committee of the Real Estate Board of New York.
The first paragraph of the report sums it up nicely: “Manhattan average asking rents for all available space declined 11 percent from the Fall 2008 to $115 [a square foot annually]. Each of the borough’s six geographic areas showed a decline in the average asking rent for all available space, ranging from 6 percent in Midtown to 22 percent on the West Side compared to six months earlier. Double digit declines in the average asking rent for all available space were reported on the East Side (12 percent), Midtown South (14 percent), Downtown and Upper Manhattan (13 percent).”
This is not to say that retail rents are totally cratering, according to Joanne Podell, executive director of retail services at Cushman & Wakefield and head of the REBNY committee.
“Retail is not falling apart in New York,” Ms. Podell said, pointing out that any place with good pedestrian traffic, like Fifth Avenue or Broadway in Soho, is holding up all right. Indeed, according to REBNY, the median asking rent on Broadway, between Houston and Broome, actually rose 14 percent compared to spring of 2008 to $480 a square foot.
But overall, there’s little question that the market has softened. And that, says Faith Hope Consolo, chairwoman of the retail leasing and sales division at Prudential Douglas Elliman, provides an opening for entrepreneurs that can be hard to resist.
“This is an opportunity they haven’t had before this,” Ms. Consolo said. “Why? All the major retailers, all the banks, took the space before. It was so expensive. Now you can make a reasonable deal.”
To name just two examples among many, in recent weeks, chef Terrance Brennan opened Bar Artisanal in Tribeca; and, in Harlem, local pet supply shop proprietor Doris Wade plans to open a seafood store called Questan’s at 2113 Frederick Douglass Boulevard.
“Maybe that’s the one gift we give ourselves,” suggested Ms. Podell. “If you live in New York, most of us work a lot of hours. I leave the office 7 o’clock at night. Am I going to cook? I don’t think so. And if you lived in the suburbs, by the time you got out and went someplace, it would be closed.”