Eateries Opening Where Banks Once Stood

Many New Yorkers likely haven’t entered a Bruegger’s bagel shop since the late nineties, when the chain closed all of its Manhattan locations as the low-carb Atkins diet swept the country.They’ll have another chance starting this fall, when Bruegger’s will open its first New York City location in a decade.The Burlington, Vt.-based company signed an agreement recently with Queens-based Hart Street to open 20 Manhattan restaurants over the next seven years.Bruegger’s isn’t the only low-cost eatery New Yorkers will soon see filling vacant storefronts in their neighborhoods. As commercial real estate slows in Manhattan, brokers say, restaurant chains are renting locations once reserved for banks and drugstores, which have halted expansion in the face of the economic slowdown. Landlords are becoming more receptive to restaurants — once considered undesirable tenants — as space sits on the market for longer.“We’re going to see a lot more food tenants in the next 12 months than we have in the past,” a senior vice president and partner at Robert K. Futterman & Associates, Ariel Schuster, said. “In the past few years, landlords were very picky about the kinds of tenants they were letting in. We’re seeing a shift there — landlords are more willing to accept restaurants.”Pret a Manger, which has 17 stores in New York City, is looking to open two more in Manhattan this year and is planning an expansion to Washington, D.C. Dunkin’ Donuts, which has 115 stores in Manhattan and 341 throughout the five boroughs, is planning a “significant double-digit expansion” in New York over the next five years, a spokeswoman, Margery Myers, said.Other food companies that are expanding include Chipotle Mexican Grill, which opened six restaurants in Manhattan last year; the Virginia-based hamburger chain Five Guys, which opened its first Manhattan location in November and has an eight-year plan to open 29 more in Manhattan, and the sandwich chain Lenny’s, which added eight locations in the city over the past five years and plans to open three more this year.The economic downtown seems to work in favor of “quick-casual” restaurants such as Bruegger’s, according to the company’s chief executive of five years, James Greco. “People need to watch what they spend, and they’re more time-pressed than they’ve ever been,” he said.“In this environment, value is so important to our clients,” Ms. Myers said, adding that Dunkin’ Donuts’ success also has to do with its speediness. “New York is a city in a hurry,” she said. “We’re a brand for people in a hurry, who don’t want to sit around but want to get their coffee, get that baked good, and get on their way.”Between 1997 and 1998, Bruegger’s closed its six New York City-area locations, including two in Manhattan and four in Westchester County. Today, the closest location to Manhattan is in Connecticut.Sun Capital Partners Inc., a Florida-based private-equity firm, bought Bruegger’s in 2003 from Nord Brue and Michael Dressell, who founded the company 25 years ago.Since Mr. Greco came on board, Bruegger’s has renovated its locations and expanded its menu to include sandwiches and salads, a combination Mr. Greco said he hopes will allow Bruegger’s to compete with Manhattan delis and lunchtime favorites such as Cosi and Au Bon Pain.A partner at Hart Street, Sami Kabir, said the company will open as many as three Bruegger’s stores in Manhattan this fall, and that potential locations include Times Square, Herald Square, Penn Station, the Port Authority, New York University, and Hunter College.The company is looking to pay between $150 and $300 a square foot for locations that are 1,000 to 2,000 square feet, according to Amy Louise Murawski, a saleswoman at Dana Commercial Group, the brokerage firm representing Bruegger’s.In the past, landlords did not like having restaurants as tenants because they often require kitchens, which are messy and smelly, and keep late-night hours. “If a landlord had their choice, they’d rather have bank,” a vice president at CB Richard Ellis, Loren Baron, said.But these days, they’re sometimes the only option. “You don’t see as many banks, the drugstores aren’t expanding as rapidly, you don’t see as many apparel chains,” Mr. Baron said.Moreover, landlords are beginning to view a restaurant as a positive addition to a building as opposed to a nuisance, Mr. Schuster said. “They’re recognizing that if you have an office building, having food in the base is a draw for tenants,” he said.Not all “quick-casual” restaurants are experiencing unbridled growth. In July, Starbucks announced plans to close 600 stores nationwide. Mr. Baron pointed out that of the hundreds that closed, only 11 were in New York City, and he suggested Manhattan’s strong foot traffic could be a reason.“Landlords are being a little more flexible in who they’re going after for their space,” Mr. Baron said. “If the space sits for a little while, they’re looking at restaurants.”

Eateries Opening Where Banks Once Stood

Eateries Opening Where Banks Once Stood

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