Manhattan Food and Bar Leasing Up Double Digits

Across the city, landlords want a seat at the table.  More specifically, they want the seats, and they want the tables inside their buildings.  Fast-casual restaurants, coffee shops, and juice bars are expanding across Manhattan, driven in part by a large millennial workforce and dense, wealthy demographic.

Also, though, as consumers behaviors have changed, opportunity has opened up for foodservice operators.  More and more retail and apparel is being purchased online, which has caused these companies to trim store sizes.  Now, with new inventory available, restaurants are building new locations even faster.  In 2015, the fast-casual segment grew to $44 billion nationwide–an 11.5% increase from 2014, according to Technomic.

Similarly, Manhattan lease transactions in the food and bar category increased 22% in 2015 over 2014, Cushman & Wakefield reports.  Meanwhile, drugstore leases were down 64% and apparel and accessories retails were down 22%.

Where banks and retailers once occupied large-footprint spaces, some landlords are building out food halls or dividing spaces into smaller units.  “You’re getting more [rent] than what a single tenant would pay,” said Brett Herschenfeld, SL Green Managing Director.

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