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Thread: How Rent Spikes Are Creating Fine Dining ‘Deserts’ In New York City

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    How Rent Spikes Are Creating Fine Dining ‘Deserts’ In New York City

    With the imminent closing of Republic, Union Square West—once home to pioneering restaurants such as Blue Water Grill and Union Square Cafe—is turning to a bland stretch of chain restaurants and stores. Here's why.

    By Kate Krader and James Tarmy

    July 20, 2017 8:20:49 AM PDT
    July 20, 2017 9:49:20 AM PDT

    In 1995, the restaurateur Jonathan Morr opened a 3,800-square-foot noodle shop called Republic on Union Square West in New York City, paying an annual rent of $220,000. “The rent was relatively inexpensive for what it was,” he said. “But remember, when I opened, Union Square was very different than it is today. There was very little there along with the drugs in the park. At the time we were taking a risk.”

    Twenty-two years later, Union Square has been gentrified beyond recognition. It's home to a Whole Foods supermarket and an apartment building whose penthouse sold for more than $16 million. And now Republic is on its way out. Morr said he expects to close the space by the end of 2017, three and a half years before the lease expires. “It’s just a fact of life—there’s no way that we’re staying there after the lease is up,” he said. Taking advantage of an impatient landlord, Morr plans to leave the space early and will "split the difference between what [the landlord] gets from us and what he’ll get from the next tenant, and call it a day," he said.

    Republic is joining a slow but distinct restaurant exodus from the area, following in the footsteps of Danny Meyer's Union Square Cafe, whose prohibitively high rent forced it to search for a new space in 2015. "There's no such thing as a New York restaurant that's immune to real estate," said Richard Coraine, the chief of staff for Union Square Hospitality Group. He noted that the original, 1985 rent for USQ was $4,500 a month. A roughly fivefold increase over 30 years is what prompted Meyer to move his beloved restaurant to its current home, on a corner a few blocks northeast of Union Square.

    snip

    For Morr and Republic, recent rent increases represented a tipping point, whereby he was profiting less from his business than his landlord. “When we opened Republic, we made six, seven, even eight times what the landlord made,” he said. Now that's changed dramatically. “Even if you do the math and make money a little bit, you don’t want to make less than what the landlord’s making."

    https://www.bloomberg.com/news/artic...itter-pursuits
    Thanks from Friday13

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    $50 per commercial square foot in '95 in a depressed area....if the guy is going broke it must be much more than that now.

    it's between $2.50 and $8 here.
    Last edited by webrockk; 1st August 2017 at 08:54 PM.

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    Quote Originally Posted by labrea View Post
    With the imminent closing of Republic, Union Square West—once home to pioneering restaurants such as Blue Water Grill and Union Square Cafe—is turning to a bland stretch of chain restaurants and stores. Here's why.

    By Kate Krader and James Tarmy

    July 20, 2017 8:20:49 AM PDT
    July 20, 2017 9:49:20 AM PDT

    In 1995, the restaurateur Jonathan Morr opened a 3,800-square-foot noodle shop called Republic on Union Square West in New York City, paying an annual rent of $220,000. “The rent was relatively inexpensive for what it was,” he said. “But remember, when I opened, Union Square was very different than it is today. There was very little there along with the drugs in the park. At the time we were taking a risk.”

    Twenty-two years later, Union Square has been gentrified beyond recognition. It's home to a Whole Foods supermarket and an apartment building whose penthouse sold for more than $16 million. And now Republic is on its way out. Morr said he expects to close the space by the end of 2017, three and a half years before the lease expires. “It’s just a fact of life—there’s no way that we’re staying there after the lease is up,” he said. Taking advantage of an impatient landlord, Morr plans to leave the space early and will "split the difference between what [the landlord] gets from us and what he’ll get from the next tenant, and call it a day," he said.

    Republic is joining a slow but distinct restaurant exodus from the area, following in the footsteps of Danny Meyer's Union Square Cafe, whose prohibitively high rent forced it to search for a new space in 2015. "There's no such thing as a New York restaurant that's immune to real estate," said Richard Coraine, the chief of staff for Union Square Hospitality Group. He noted that the original, 1985 rent for USQ was $4,500 a month. A roughly fivefold increase over 30 years is what prompted Meyer to move his beloved restaurant to its current home, on a corner a few blocks northeast of Union Square.

    snip

    For Morr and Republic, recent rent increases represented a tipping point, whereby he was profiting less from his business than his landlord. “When we opened Republic, we made six, seven, even eight times what the landlord made,” he said. Now that's changed dramatically. “Even if you do the math and make money a little bit, you don’t want to make less than what the landlord’s making."

    https://www.bloomberg.com/news/artic...itter-pursuits
    When you have a mayor that raises property taxes through the roof you get rent spikes. They don't buy rental property as a hobby, but as a source of income, Cost of doing business increases the cost of the goods and services increase.
    Thanks from webrockk

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    Quote Originally Posted by TNVolunteer73 View Post
    When you have a mayor that raises property taxes through the roof you get rent spikes. They don't buy rental property as a hobby, but as a source of income, Cost of doing business increases the cost of the goods and services increase.
    The property tax situation is entirely different in California, and rent hikes put long term restaurants out of business (one San Francisco restaurant had been in business at the same location for over a hundred years) here too.

    Funny how landlords raising rents for no other reason than can, putting business owners out on the street, is okay by conservatives, but raising the minimum wage has the same people all up in arms.

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    It's a vicious cycle.

    Politicians raise business and property taxes to fund their benevolence.

    the tax base starts leaving the community for greener pastures.

    the once vibrant community begins to decline, along with the property values.

    the poor move in to take advantage of the bargains and further ruin ensues.

    the next generation's entrepreneurs, industrious first time homeowners and dreamers see bargain basement property and start sprucing up the community.

    Property values start increasing.

    Real estate speculators see opportunity to profit and the price of property increases more rapidly (not necessarily the value).

    Politicians raise business and property taxes to fund their benevolence.

    rinse/repeat.
    Last edited by webrockk; 1st August 2017 at 09:31 PM.

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    Quote Originally Posted by labrea View Post
    The property tax situation is entirely different in California, and rent hikes put long term restaurants out of business (one San Francisco restaurant had been in business at the same location for over a hundred years) here too.

    Funny how landlords raising rents for no other reason than can, putting business owners out on the street, is okay by conservatives, but raising the minimum wage has the same people all up in arms.
    Yes you increase taxes, Renters have to increase rent.. That is what happens when you elect moonbeam as Governor. Income taxes, property taxes, business license fees increase. Hey, that is why 26,000 is a living wage in Atlanta and is 60K in LA.

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    Veteran Member bajisima's Avatar
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    Quote Originally Posted by labrea View Post
    The property tax situation is entirely different in California, and rent hikes put long term restaurants out of business (one San Francisco restaurant had been in business at the same location for over a hundred years) here too.

    Funny how landlords raising rents for no other reason than can, putting business owners out on the street, is okay by conservatives, but raising the minimum wage has the same people all up in arms.
    A big problem here in New England is both foreign and local investment bankers who rent both commercial properties and homes. They have been gobbling up starter homes and then renting them out at high rates so first time home buyers have little stock. Imagine they are buying up commercial stuff in NYC as well.

    Investors Pay Cash for Homes, Push Millennials Out of Market | Money
    Thanks from NeoVsMatrix and labrea

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    Veteran Member bajisima's Avatar
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    Quote Originally Posted by webrockk View Post
    It's a vicious cycle.

    Politicians raise business and property taxes to fund their benevolence.

    the tax base starts leaving the community for greener pastures.

    the once vibrant community begins to decline, along with the property values.

    the poor move in to take advantage of the bargains and further ruin ensues.

    the next generation's entrepreneurs, industrious first time homeowners and dreamers see bargain basement property and start sprucing up the community.

    Property values start increasing.

    Real estate speculators see opportunity to profit and the price of property increases more rapidly (not necessarily the value).

    Politicians raise business and property taxes to fund their benevolence.

    rinse/repeat.
    Well that's the goal in many places, take downtown and gentrify it. We saw it in the 80s with the yuppies. They bought up places, fixed them up and then sold or rented them for a fortune. Its great because downtown looks great and it attracts wealthy young people but it does kick out long time residents and shop owners. This is just the yuppie movement all over again. Unfortunately towns and cities encourage it because it drastically increases their tax base but it forces many to have to leave the city. Cities are just getting far too expensive all over for middle class people.
    Thanks from labrea

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    Established Member NeoVsMatrix's Avatar
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    Quote Originally Posted by TNVolunteer73 View Post
    When you have a mayor that raises property taxes through the roof you get rent spikes. They don't buy rental property as a hobby, but as a source of income, Cost of doing business increases the cost of the goods and services increase.
    Aaaand.. another "read" that went right over your head..


    For Morr and Republic, recent rent increases represented a tipping point, whereby he was profiting less from his business than his landlord. “When we opened Republic, we made six, seven, even eight times what the landlord made,” he said. Now that's changed dramatically. “Even if you do the math and make money a little bit, you don’t want to make less than what the landlord’s making."
    Thanks from labrea

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    Veteran Member Dr Sampson Simpson's Avatar
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    Quote Originally Posted by bajisima View Post
    A big problem here in New England is both foreign and local investment bankers who rent both commercial properties and homes. They have been gobbling up starter homes and then renting them out at high rates so first time home buyers have little stock. Imagine they are buying up commercial stuff in NYC as well.

    Investors Pay Cash for Homes, Push Millennials Out of Market | Money

    Funny, just had this conversation this weekend about housing prices and how investors, many from China and Japan, are overpaying for housing as investments. This model is unsustainable. HOusing already in big cities is ridiculous. HOw the heck do these cities function? What about those making min wage or do service jobs that don't bring in a lot of money? you need those workers, but where can they live? you expect them to commute 6 hours a day to work for shit pay? It's horrendous.

    And then people wonder why everybody is so angry these days
    Thanks from bajisima and labrea

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