New York City hasn’t seen this many restaurant openings since 2007, however, it also has had double the amount of restaurant closings compared to last year. There were 160 New York restaurant openings in 2014, and 82 closings compared to 42 last year. Tim Zagat, co-founder of the Zagat Survey explains his take on why some restaurants are failing and others are spreading, “The discrepancy between openings and closings is the largest since 2005…there are a lot of rent-caused closings that are maybe driving up the number. And that will affect in the industry in the coming years.”
Zagat goes on to explain that rents will always go up in New York City and if a restaurant has been open 10 years (it is common there will be a large increase, which is what is happening all across the city and explains so many restaurants going out of business. When restaurants have 10 year leases, which is fairly common, at the end of that lease landlords tend to increase the rent up to ‘market rates,’ which usually are just not feasible for the restaurant forcing them to close.
A few notable restaurants which are experiencing this phenomenon include Danny Meyer’s Union Square Cafe and WD-50 on the Lower East Side. Meyer comment in his New York Times Op-Ed, “It’s hard to come to grips with the notion that our success has, in part, contributed to our inability to remain in our neighborhood.” WD-50 will close end of this month to make way for a new building. To read more about the openings and closings of NYC restaurants, click here