The Stoler Report with Cory Zelnik

0:00 Speaker 1 Good morning. This is Mike Stoler for the Stolely Real Estate rebrought on the Cats Roundtable. What’s happening in retail? New stores are opening all over the city. Things are looking bright. That wasn’t the way a long time ago, but now things are out there. So today I have the opportunity to have a dear friend one of the

0:16 New York City’s retail leading consultants and brokers firm, Corey Zenich, who is a founder celebrating the eighteenth year and CEO of ZELD looking call. Thanks for being here. Thanks, Michael, always a pleasure. It’s great to see you back over at the studios. You know at ABC. You’ve been here before. Yes, So what’s really happening today is the celebration of what Naya.

0:39 Speaker 2 Well, Naya, the Mediterranean QSR quick service restaurant.

0:43 Speaker 1 Quick service restaurant on Park Avenue.

0:46 Speaker 2 Park Avenue, forty ninth Street, just opened up and I walked by it on my way here.

0:50 Speaker 3 The line is around the corner.

0:51 Speaker 2 They’re having their fifty percent off giveaway for as a grand opening, and it’s crowded, but Naya is a great operator. They have probably a dozen, maybe fifteen stores around the city.

1:04 Speaker 3 And they have a great business.

1:05 Speaker 1 Okay, it’s also the opening of the new Hope Foods Dairy.

1:09 Speaker 2 What did it call it, Well, it’s like it’s Whole Foods. But it’s the thing about it is it’s a reduced size. It’s a smaller version of a traditional Whole Foods that may be forty or fifty thousand square feet. This is going to be about ten twelve thousand square feet up at Third Avenue and sixty ninth Street.

1:25 Speaker 1 Right. They’re planning four others in the city before the end of the year. That’s their goal, right, So they’re really moving over there on that situation. Besides that, what’s happening who else is coming into the down Vorrek Vortex.

1:37 Speaker 2 Well, Vori Vori is a high end apparel retailer out of California. They’re on a big, big growth spurt. They just recently signed what one would consider a flagship location about five thousand square feet down in the flat Iron District, an area of town that if you ask me to you know, and you may ask me alone the way

1:58 in this conversation about where the busiest areas in town are. The flat Iron District has really bounced back nicely and so the numbers are high. They’re the average rents in the Flat Iron district. They’re in the vicinity of about three hundred and ninety four hundred dollars a square foot.

2:12 Speaker 1 Why were they pre pandemic.

2:14 Speaker 2 Pre pandemic, they were probably you know, low threes, high twos. During the pandemic, it obviously they fell off and there was nothing going on there quite frankly, which was similar to the whole city.

2:27 Speaker 3 But it has really bounced back nicely.

2:29 Speaker 1 So what are the other areas in the city that are growing so far? West side?

2:34 Speaker 2 Yep, well so Soho and Times Square were probably two of the first areas that came back post pandemic, very tourists driven. So the tourists started to come back and they hit these areas.

2:46 Speaker 1 Everybody’s providing chicken raising canes.

2:49 Speaker 3 Right, you jump met, you jump into food.

2:51 Speaker 2 Yes, raising raising canes is a they’re grabbing a footprint here in New York City as a whole.

2:56 Speaker 3 It’s all the Burroughs included.

2:58 Speaker 2 So they have they opened up a big flagship in Times Square. Their sales are estimated year one to be about twenty eight million dollars, and that they just as just chicken fingers and they’re a big brand around the country.

3:13 Chick fil A continues to roll out stores. I represent a company called Panda Express, twenty seven hundred stores around the country. Also looking to increase the footprint around the city. We’re about twenty stores now in all the boroughs and QSR seems to be the thing.

3:29 Speaker 3 Naya is a little bit more local. Kava is another.

3:32 Speaker 1 Brand was doing very well around the country.

3:35 Speaker 2 Yeah, Kava went public about six or seven months ago and.

3:39 Speaker 3 They’re doing very well. They seem to have a slow, slow.

3:42 Speaker 2 Growth strategy, which is beneficial to them, and so far their numbers look great around the country, So they’re doing very well.

3:49 Speaker 1 With regard to Times Square, who else is opening up not being a QSR?

3:54 Speaker 3 You know down in.

3:56 Speaker 2 Well down in Flat Iron, we talked about the retailer the Lulu Lemons have expanded. You’ve heard of them obviously, but they’ve expanded their brand down there, non QSR. Madison Avenue Luxury also a strong, strong bounce back post COVID.

4:12 Speaker 1 That’s fifty seven to seventy seconds.

4:15 Speaker 2 In that market. Prior to COVID, the numbers hit as high as two thousand dollars a square foot during COVID they floored at five hundred dollars a square foot, and so a lot of the luxury brands saw that as opportunity and they stepped in and so, and now the numbers are well north of one thousand a foot. I

4:37 haven’t heard two thousand yet, but I have heard twelve fifty, thirteen hundred and fourteen hundred a foot where deals are getting done and a lot of the luxury brands are opening or repositioning with.

4:47 Speaker 1 Regard to that. What’s happening on Madison from forty fourth to fifty seventh Street.

4:52 Speaker 2 You know, it’s one of those it’s one of those valleys in the city that you have to be here to really understand it. Things to slowly turn around, and that is from the benefit of people coming back to the office. You know, that’s prime, it’s prime midtown territory.

5:08 And you know you have your your parameters are probably forty second to fifty seventh Street as your boundaries.

5:15 Speaker 3 And they’re starting to slowly fill in.

5:18 Speaker 2 Chase’s Tower is still two years away from being complete, but Grand Central Madison has opened, so there’s a tremendous amount of traffic flow along the streets. But it’s still very quiet there on the weekends, so it’s right hard.

5:30 Speaker 1 But I think part of the neighborhood is doing well because the IR is now going into Grand Central.

5:36 Speaker 2 One hundred percent, and that ties into the Grand Central Madison opening. They have entrance exit on forty seventh in Madison, so it’s just pulling the people right out, putting them right on the street.

5:47 Speaker 1 When we spoke the other day, we were talking about if you’re a restaurant, the store could be leased within two weeks or something.

5:53 Speaker 2 Well, well, yeah, what I had said was what the phrase is second gen. The restaurant tours want a location that was previously a restaurant, so their initial capital expenditure is low, and they can go in and you know, change the paint and do things like that and move right in. And there is so much demand. The entrepreneurial

6:14 spirit in the restaurant business throughout the city is unbelievable. The restaurant openings far exceed any other category in this city. And so when when a restaurant closes, the next one the next tenant is waiting in line for the opportunity.

6:30 Speaker 1 Now, what about the luxury restaurants, the Daniel Blue and so on.

6:34 Speaker 2 You know, they are total separate category. Those type of tenants usually have partnerships and relationships with the landlords and the buildings that they’re going in. You see these things at one Vanderbilt at four to twenty five Park Avenue, and so what they do is they set up they structure a type of partnership with the landlord.

6:53 Speaker 1 What about the cannabis business.

6:56 Speaker 3 The cannabis business is in a certain type of transition.

6:58 Speaker 2 We were now fat and the mayor’s doing the best he can to get rid of all the illegal smoke shops that opened up. And that was you know, they all opened up as part of the COVID process because you had landlord. Not every landlord is Vornado or Rudent and things like that or Tishman Spire.

7:18 Speaker 3 There are a lot of mom and pop landlords. In fact, they’re the majority in this city.

7:21 Speaker 2 And so they had vacant spaces and there were these tenants that were coming in at the time that weren’t illegal.

7:28 Speaker 3 They came in and did.

7:29 Speaker 2 CBDs and they did small delicatessens and then what happened was they got turned over and converted into illegal marijuana shops.

7:37 Speaker 3 And they call them smoke shops.

7:39 Speaker 2 And what happened was at the same time that the OCM, the Office of Cannabis Management, was trying to control the legal cannabis business’s growth, and so there was a lot of pushback. And now they’re shutting down most of the illegal operators. It’s gonna take some time. They were up to about three thousand of them, and the legal ones

7:56 are starting to slide in. But it’s my understanding that the oc and that process is an onerous one.

8:02 Speaker 1 Okay. One subject that you and I discussed the day the other day and which happened to me yesterday while walking on sixty first Street between Third Avenue and Lexington Avenue, I was accosted at three point fifteen in the afternoon.

8:16 Safety is a problem today, you know, people with restaurants and so on. What’s your thoughts about that.

8:20 Speaker 3 I think that’s probably the number one problem.

8:23 Speaker 2 I think that the entrepreneurs or the major companies, they have the money to get their stores open and operating, and they’re looking to do it because they believe in New York over the long haul.

8:33 Speaker 3 But currently crime is a problem.

8:36 Speaker 2 It’s just whether it’s you walking down the street and you know thankfully you aren’t hurting anyway. Or someone sitting outside at a restaurant and a thief comes up to them and sees the watch they’re wearing and just grabs it from them sitting at an outdoor cafe. Or it’s the proliferation of these criminals that walk into the various

8:58 drug stores and just up bags. They just fill up a bag and they walk out. And quite frankly, this goes back about a year and a half ago. I’m standing in line at the pharmacy and I saw one of these criminals loading up a bag at the makeup counter and I videotaped it, and I saw the manager

9:17 come over to him and just say, hey, that’s enough time to go. And on my way out, I went over to the manager, I said, what is that? He goes, They’re here every day. I can’t fight them. My bosses don’t want me fighting them. I give them their minute, let them do what they do, and then I just

9:30 ushered them out.

9:31 Speaker 1 But I think, in conclusion, New York City is resilient. Things are getting positive, the retail is doing well. And I’d like to thank Corey Zelle and look for being here today. See you next week.

9:40 Speaker 3 Thank you, Michael. I appreciate it.