Shrugging off the pandemic’s impact on sales, supply and hiring, food-and-beverage uses continue to lead all retail-leasing categories in the Big Apple – and the lead even grew larger over last year.
Chef David Burke’s Mister French is moving from 218 Bowery to the larger, 4,400-square-foot former Almayass digs at 24 E. 21st St.
We had a look at some not-yet-released CBRE data which show the extraordinary resilience of edibles and drinkables in today’s historically challenged retail-leasing market.
In 2020, F&B leases comprised 28.6 percent of all retail deals in terms of number of locations, compared with 17.6 percent for runner-up apparel. The F&B square footage of 242,713 square feet handily bested 179,076 for apparel uses.
Runner-up categories financial services, jewelry, cosmetics and health care lagged far behind.
The data for 2021 to date show even greater F&B strength.
It accounted for 31 percent of all retail deals, trailed by apparel at 17.1 percent. Although square footage wasn’t yet available, the numbers are expected to show commensurate F&B dominance over other categories.
Perhaps more impressive, the category doesn’t even include grocery, convenience or wine shops.
In fact, although often overlooked, F&B has been at or near the top of retail categories since CBRE first started tracking them in 2010.
CBRE retail-leasing SVP Matt Chmielecki said the resiliency of F&B throughout the pandemic is all the more remarkable given that, “F&B deals can take months to negotiate.” But tenants have a very forward-looking approach.
“No one’s used the term ‘new normal’ for 6 months. Now, everybody sees light at end of the tunnel,” Chmielecki said.
He said that most new deals “have some sort of ramp-up period” for a year or two that includes a low-base rent to start and percentage-rent arrangements that benefit both sides. “Landlords and tenants are now on the same page. By year three of a new lease, rents will look substantially like they were before,” he said.
Coincidentally or not, five of nine nominees for the Real Estate Board of New York’s “Most Ingenious Deals of the Year Awards” for retail are for F&B leases. Prominent among them is seafood restaurant Avra’s commitment to more than 16,000 square feet at Rockefeller Group’s 1271 Sixth Ave., where Avra was repped by a CBRE team.
The winners will be announced on Aug. 5.
As if to illustrate CBRE’s findings, two other recent restaurant deals show how perseverance and patience overcame the challenges of the Covid-19 era.
Chef David Burke’s Mister French is moving from 218 Bowery to the larger, 4,400-square-foot former Almayass digs at 24 E. 21st St., while American bistro L’Adresse is expanding from its Bryant Park location with a second home at 1184 Broadway at 29th Street in Nomad.
Both tenants were represented by the Heller Organization’s Joshua Singer. He said talks for the Mister French move began in summer of 2020 “when New York City was a shell of itself. The deal was able to finally move forward this past April,” Singer said.
The asking rent for the 15-year lease was $150 per square foot. Landlord Noam Management was repped by a Colliers team.
L’Adresse took even longer. “The lease was originally signed shortly before the pandemic in February 2020,” Singer recalled. “Like so many others, we had to [re]negotiate throughout the forced closures and come to an agreement beneficial to both parties.”