How can restaurants survive?
Time and time again we have seen landlords get excited about the height of a market so tenants have to pay top dollar for their properties. Then there is that turning point when multiple tenants leave and instead of putting a new tenant in their place, the landlords hold on to the hope that someone else will come in at the same price that the last tenant paid even though the market has softened.
I was involved with a lease where the company (I am an investor) quickly realized it could not even break even with the price of the lease. They needed the price to be lowered at least 25% than they were paying. The property had been empty for years and was owned and managed by a very large real estate company. I took it upon myself to negotiate the rent reduction with the landlord ( who was the VP of the company). I kept driving home that the place had been empty for years and that empty property made no sense for the local community. Wouldn’t it make more sense to at least have a tenant in there and get rent vs just sticking with an empty space for more years? In the end, he gave me what I wanted and the company has occupied the property for many years.
Landlords should be fined if their properties remain empty eye-sores to the local community. We are seeing so many empty stores these days and it is not a good look. I have never understood why a landlord would rather have an empty space vs finding the right tenant at the right price. The numbers just don’t make sense.
Restaurants are having a really difficult time surviving in NY these days. The price of real estate is super high and the cost of staff is changing with minimum wage. I am all for minimum wage, family leave and all the other costs associated with running a restaurant (business) even down to the person washing the dishes but these costs make it really difficult for most restaurants to break even. It was hard enough without these changes to survive. The survival rate was low even before these changes.
We live in a city where going out or ordering in is the norm. Perhaps there should be some type of tax break for restaurants so that they can survive. How do we create tax incentives for eating establishments? Every time I talk to a restaurant owner, they lament about how these costs have changed everything and it is making it difficult to even survive. As in they are barely breaking even.
Something has to change around the restaurants and the empty spaces. It impacts our city and there must be a creative way to make sure that the stores are full and the restaurants can survive. It will be better for everyone.