By
the
Numbers
The venerable Union Square Cafe is one of the high-profile restaurants slated to close because of rising rents.
48% The retail rent increase on Upper
24,000 Total count of NYC restaurants today.
Fifth Avenue, between 49th and 60th streets, in the last five years. Average asking rents on the stretch, which is home to restaurants such as Fig & Olive and 21 Club, are now $2,618, compared with $2,283 in the fourth quarter of 2012.
That number has more than doubled since 2000, from 10,636.
5 to 10% City restaurateurs say that the
Rising rents on the menu
Restaurant industry must add spiking retail costs to list of challenges
T
he New York City restaurant business is not for the faint of, well, stomach. And in the past few years, that’s become even more apparent, as a number of acclaimed, long-standing restaurants — the nearly 30-year-old Union Square Café, celebrity chef Bobby Flay’s flagship Mesa Grill and Wylie Dufresne’s groundbreaking wd~50 among them — closed or announced plans to shutter because of rent increases or to make way for more lucrative real estate developments. Those high-profile restaurants are not alone in dealing with a challenging real estate landscape for eateries. “People pay $1,000 per square foot for retail. I couldn’t survive selling hot dogs at that price,” said Wayne Rosenbaum, owner of iconic hot dog chain Papaya King. The restaurant has managed to hold onto its original Upper East Side digs, for which Rosenbaum said he pays between $675 to $800 per square foot, for nearly 80 years. But when he recently expanded, Rosenbaum launched a food truck, a low-cost alternative to renting more space. Yet, despite the spate of high-profile closure news, the number of New York City eateries continues to rise. This month, TRD looked at New York City’s dynamic and ever-changing restaurant industry. By Sasha von Oldershausen
Back on the market By the Numbers
formula for rent in NYC should be about 5 to 10 percent of their gross revenue. They are sounding the alarm because rent increases in the current market are beginning push their leases higher than that.
$8 Price per square foot Union Square Café paid for its 6,000-square-foot space on East 16th Street when it opened in 1985, for a total of about $48,000 annually. The restaurant, which will close at the end of next year, can’t afford the current asking price — $650,000, or $108 per square foot. Union Square Hospitality Group’s Danny Meyer
269,500 Number of people employed in the restaurant and food service industry in New York City in May, up 3.5 percent in the past year. The figure jumped 32 percent in the past five years, and 58 percent in the past 10 years, in large part due to the increased tourism in the city.
515 Number of NYC locations for Dunkin’ Donuts, the chain with the largest presence in the entire city, including non-food industries, up from 429 in 2009. Subway ranks second with 467. Starbucks, meanwhile, has 283 locations.
$20,000 Papaya King’s Rosenbaum said the cost of running the Papaya King food truck, including a commissary fee and truck maintenance and repair, comes to only $20,000 a year. That, he said, equals roughly the cost of one month’s rent at one of his two storefronts.
7th place New York City ranks seventh in total number of food trucks, according to a survey of 32 U.S. cities. However, the number of food trucks per capita put New York in last place, with 1.32 food trucks per 100,000 people. The highest ranking city was Orlando, Florida, with 37.67 food trucks per 100,000 people.
19,969 Number of NYC restaurants that received an “A” rating from the New York City Department of Health and Mental Hygiene. Meanwhile, 2,000 received a “B” rating and 223 received a “C” rating, while 1,501 restaurants have grades pending.
23% Increase in number of Brooklyn restaurants listed in the five-borough Zagat edition since 2005, bringing the total to 216 from 175.
$48.56 Average cost of an NYC dinner in 2013 — drink, tax, and tip included. That number is up from $43.46 in 2012. Sources: New York Times, Grub Street, Cushman & Wakefield, NPD Group, NYC Department of Health & Mental Hygiene, Business Insider, Eater NY, Zagat, State Department of Labor.
435 East 52nd Street, Riverfront Duplex | $8,200,000
NIKKI FIELD Senior Global Real Estate Advisor, Associate Broker | 212.606.7669 | nikki.field@sothebyshomes.com | www.nikkifield.com PATRICIA A WHEATLEY Global Real Estate Advior, Associate Broker | 212.606.7613 | pat.wheatley@sothebyshomes.com East Side Manhattan Brokerage | 38 East 61st Street, New York, NY 10065 Sotheby’s International Realty and the Sotheby’s International Realty logo are registered (or unregistered) service marks used with permission. Operated by Sotheby’s International Realty, Inc. 08-14-field.indd 1
20 August 2014 www.TheRealDeal.com
7/30/2014 11:54:35 AM