Bussiness
Restaurant Resurgence Reflects Optimism Post-Pandemic Demand Is Here to Stay
Chef Franklin Becker and partner Stephen Loffredo spent $7 million on the build-out of the two-story seafood eatery Point Seven, located in the MetLife building adjacent to Grand Central Terminal. When they opened a year ago, they were the first restaurants to reoccupy the spaces that had been shuttered in the office tower when the pandemic made the area a ghost town.
Recouping that kind of investment and making a profit is a bet not just on the recovery that has occurred in Midtown as workers returned to the area part of the week, but on reestablishment of the pre-pandemic work week so that the restaurant is filled continuously.
“We opened up in the location because we believe in the resurgence in Midtown,” said Becker. “As offices realize a four-day work week is not effective, we believe people will start to settle into a five-day workweek.”
Becker and Loffredo are far from alone as experienced restaurant owners and a few newcomers snap up available spaces, signaling an industry that has finally recovered from the travails of the pandemic. Employment at restaurants and bars is almost back to the 2019 record level — averaging about 323,000 in recent months.
And while activity continues in the boroughs and in residential neighborhoods that were the first to rebound, the most notable activity now is in the city’s business districts.
“We are seeing more growth in Midtown East, the Plaza district and business-centric locations that have come back a little bit with a return to office,” said Spencer Levy, a broker specializing in food and beverage with the real estate firm CBRE.
“That’s why there are so many transactions.”
According to CBRE data from 2022 to 2024, food and beverage topped all other categories of retail leasing, with 460 deals for 1.75 million square feet making up 30% of all retail leasing in Manhattan. So far this year, those leases have accounted for one-third of all the space leased.
The area around Grand Central has attracted big names, lured in part by the increased foot traffic resulting from tougher in-office work attendance requirements by the financial firms in the area and the addition of Long Island commuters now arriving at Grand Central.
Capital Grille relocated from 42nd Street to the MetLife space that had been once home to the popular Italian-styled eatery Naples. A few blocks north on Park Avenue, the famed chef David Burke opened Park Avenue Kitchen.
Point Seven at first was busiest for both lunch and dinner on Tuesday through Thursday.
Mondays are now improving, said Loffredo, but Fridays remain soft and the restaurant has to figure out how to lure people to dinner on Saturday. It also has started serving breakfast to generate more checks, competing with Pershing Square, which is across from Grand Central and is many business people’s go-to place for morning meetings.
Like so many others who are opening new eateries, Becker and Loffredo own two other restaurants — in their case one bar and five fast casual outlets. In all, they employ about 250 people, 75 at Point Seven and 10 who comprise the corporate staff. Diversifying allows them to use their staff most effectively, Loffredo adds.
Union Square is seeing a similar rush to take available storefront spaces, with 13 restaurant leases signed in the first nine months of the year, double the number in the same period in 2023, according to the area’s business improvement district.
“Food and beverage is leading leasing in the area as we seen a robust return of foot traffic,” said Julie Stein, executive director of the Union Square Partnership. The newly rented spaces include both former restaurants and newly activated spaces, and the establishments span a wide spectrum of food types.
Long Island City, which also boasts a combination of office workers and residents, has become a target of owners with operations elsewhere in the city. Greats of Craft, a specialty beer purveyor, is opening its first location outside Manhattan. Pueblo Querida Coffee Roasters is testing the waters outside its base in north Brooklyn.
Amin Ruhel owns three other restaurants, lives in Sunnyside and comes to Long Island City often for dinner. He decided to open Oh! Calcutta, which emphasizes West Bengali cuisine.
“I always thought this would be a great neighborhood for a restaurant because it’s booming,” he said. “It’s where I wanted to be.”
John Truong, who successfully established a Vietnamese restaurant in Flushing during COVID, was approached by representatives of the landlord of a location in Long Island City that had been occupied by a dim sum eatery. He had been planning on expanding and found the neighborhood’s mix of residents and office workers irresistible.
Some $700,000 later, Chef Papa Vietnamese Kitchen is in a soft opening, drawing as many as 300 people a week for its marriage of cheap Vietnamese finger food with more upscale items that can cost as much as $30.
As always, a few brave people are taking their first plunge into this risky business.
Felix Cesar spent 20 years as an electrician before he decided he had to try something else. He wound up connecting with a trained chef, Fabiola Besson, at church, and the two have opened Sweet Sundays Café in Brooklyn’s Flatbush, which is serving breakfast entrees and sandwiches he calls “modern French Caribbean.”
And they are doing it on a shoestring. The build-out cost only $80,000 because Cesar did most of the work. They are up to 70 customers a week but need a lot more people to come in the door and for them to spend more money.
“I have no regrets,” he said. “It’s definitely challenging being in the hospitality business but I love the interactions with people.”
Leasing is running slightly behind 2023’s numbers because there are fewer restaurant-ready spaces available, says Levy of CBRE. Union Square has a small number of vacant prime corner sites formerly occupied by big box retailers, notes Stein, but the cost of renovating the space for a restaurant would be substantial.
The expansions come as existing restaurants report a disappointing summer.
Three-quarters of the eateries surveyed by the New York Hospitality Alliance reported lower revenues this year than last year. Restaurants near the hotels that are being used as migrant shelters report their business has plunged, added Andrew Rigie, executive director of the Alliance.
But those that have opened new eateries remain confident and hopeful about the remaining months in the year.
“I think Midtown is being rediscovered and we have momentum,” said Loffredo of Point Seven. “We are very interested to see how the holiday season goes.”
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