Meet the New Restaurant, Same as the Old Restaurant
Sweet rent deals and turnkey spaces are enticing takers even with the pandemic continuing to cripple the city
East Village sushi joint Jewel Bako had been in business for almost 20 years, winning a Michelin Star every year since the award arrived in New York in 2006. It spawned a sister restaurant next door in Ukiyo, which also won a star in 2019. But when the pandemic hit, owner Jack Lamb permanently shuttered both. “It’s been a good run,” he told me in June as he auctioned off all of the service ware.
But 239 East 5th Street is open for business again, outdoor dining and all. It’s under new management: a young team installed by a meat wholesaler trying to break into the restaurant game for the first time. Called J-Spec for “Japanese Specification” (by their own admission, a made-up phrase), the restaurant has been open since November and focuses on dishes that revolve around the Japanese wagyu imported by their parent company.
“We opened during the middle of the pandemic and everyone said we were crazy,” says Jumpei Sakai, the culinary director at Tomoe Food Services, who is trying to spread the wagyu gospel at J-Spec with prices that are “cheaper than Costco.”
While the number of restaurants that have permanently closed during the pandemic is unknown, estimates are in the thousands for the New York City area alone, a devastating blow to the business owners and hundreds of thousands of workers that relied on the industry for income. There are, of course, silver linings that seldom make headlines: new restaurant openings began to rise again after a steep drop in the spring, to almost pre-pandemic levels by the time Yelp filed its report about Q3 2020.
In New York State, 2,548 new food and beverage businesses have opened since early March, many of them taking advantage of turnkey situations created by recently closed restaurants and landlords looking to fill vacancies as quickly as possible in an uncertain market. Offerings border on fire sale territory, with five months of free rent in one case, to a year of heavily reduced rent in others. Sometimes the new tenants get both!
“Most landlords are eager to get spaces leased quickly,” says James Famularo, president of Meridian Retail Leasing. Famularo’s name and phone number adorns hundreds of former restaurants, the distinctive baby blue sign declaring “RETAIL SPACE FOR LEASE” an all too common sight in the city’s pandemic landscape. He is bullish on New York (or at least he is when a journalist reaches out to him.)
“There has never been a better time to get great deals on commercial spaces in Manhattan,” Famularo says.
Low rent—50% off for the first year in the case of J-Spec, and a flexible option to exit at any time—certainly drove Tomoe Food Services to snap up the former Jewel Bako and Ukiyo spaces. But there was an even better enticement: the bones of the very successful restaurants. The group kept almost everything the same: the interior decor, the tables, the chairs, the exterior, and even most of the kitchen, installing just a couple of fridges and one new stovetop before opening. In all, Sakai estimates that he saved about half a million dollars in buildout costs, allowing him to launch a restaurant in the middle of the pandemic as lean as possible.
Across town on University Place, John Fraser shut down his vegetarian joint Nix in June. But by August, the space had been taken over by vegan restaurant group Blossom, which cherry picked that location because it didn’t require many changes.
“If you take a restaurant that serves meat and fish and things like that, there’s a lot more cleaning to do, it’s a different energy in the kitchen,” says Blossom restaurant co-founder and owner Ronen Seri, who confirmed to me he received half-off rent for the first year. “I wouldn’t do this in any other place, honestly.”
Peeking into the cracks of paper meant to obstruct the view of nosy journalists at 7 Spring Street, I was able to spot construction inside the former Uncle Boons space, but was unable to determine who had taken over (Calls to the landlord were not returned.) And at the former Bouley at Home location on West 21st Street, the giant posters bearing Famularo’s name have been removed—he confirms to me that there are several offers on the table.
“We are signing deals all over the city,” says Famularo.
The fine print to all of these new openings replacing fallen restaurants is that we’re still in the middle of a pandemic and nobody is making money yet. “50% capacity is the minimum to break even,” says Sakai. “We’re not looking for profit at the moment, only minimizing cash out the door.”
But these new restaurants, forged in the fires of the pandemic, have low overhead and are better suited to survive months of operating at a loss. As for the rent deals? There are sure to be many more: indoor dining remains a distant dream, and sales during the post-holiday period are usually dreadful for the industry, pandemic or not.
“A lot of restaurants will give up this winter,” says Sakai.
New York City is currently at 9.38% positivity with 3960 new cases per day (7 day average) and 256 new people admitted to hospitals with suspected COVID-19.