A Surge of New Restaurants Drives New York City’s Storefront Revival

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A Surge of New Restaurants Drives New York City’s Storefront Revival

Store vacancy rates are still above prepandemic levels, but new food and drink businesses, led by Mexican, Japanese and Caribbean kitchens, have helped fill the void.

Andrés Tonatiuh Galindo Maria, the co-founder of Nenes Taqueria, opened its first permanent location in New York City in late 2020.Credit...Hiroko Masuike/The New York Times

By Stefanos Chen

Nov. 15, 2024, 3:01 a.m. ET

New York City’s thousands of empty storefronts, a symbol of the lasting effects of the coronavirus pandemic, are filling up faster than many predicted.

Thank your local taqueria.

A surge of food and drink businesses, led by Mexican, Japanese and Caribbean kitchens, most of them outside Manhattan, have played an outsize role in the city’s storefront revival, according to a study released Friday by the Department of City Planning.

About 16,000 of the city’s 143,000 storefronts were empty in the third quarter of this year, for a vacancy rate of just above 11 percent. The share of empty stores has fallen citywide for four straight quarters.

Storefront vacancy rates in Queens, Staten Island and the Bronx specifically are already below 10 percent, which is widely considered a healthy level, the report showed.

“It’s remarkable how few storefronts are vacant today,” said Jonathan Bowles, the executive director of the Center for an Urban Future, a public policy think tank that reviewed the study. “And so much of it is about food coming to the rescue.”

New York has long been a culinary destination, but after four years of stark job losses in other forms of retail, as apparel and electronics sellers have closed, the city is now — perhaps more than ever — relying on dining to brighten its darkened storefronts and bolster the economy.

The shift has been long in the making. From 2000 to 2023, the number of restaurants in the city nearly doubled, climbing to over 21,170, according to an analysis of data from the New York State Department of Labor.

In the same period, there has been a drop in nearly all other types of storefronts, including retail, pet care and professional services. Since 2020, there were 2,200 more closures than openings in so-called dry goods, which include clothing, furniture and beauty products, according to the report.

Mr. Bowles attributed the decline in most types of retail to growing competition from online shopping, and to jobs lost during the pandemic that never came back. For a brief time, unlicensed smoke shops helped prop up the real estate market, but hundreds have recently been shut down in city raids.

In a statement, Mayor Eric Adams noted that the city had added restaurants in all five boroughs. “We’ll keep cutting red tape and supporting our hospitality businesses and entrepreneurs to continue this amazing growth,” he said.

More New Yorkers are eating where they live

More than 70 percent of neighborhoods citywide have seen an increase in food and drink businesses, according to the report.

But the change has been most notable in the boroughs outside Manhattan, where a large share of residents are spending more of their time, thanks in part to remote work flexibility that started during the pandemic.

From early 2020 to this summer, Greenpoint, Brooklyn, had a net gain of 57 new restaurants, the most of any neighborhood. It was followed by Park Slope, Brooklyn, and Flushing, Queens, which each added 48 food and drink businesses.

Manhattan has, by far, the biggest dining scene, with over 9,400 food and drink spots, but its central business districts lost the largest numbers of restaurants during the same period, Mr. Bowles said.

The Financial District in Lower Manhattan had a net loss of 45 restaurants, a 12 percent decline. Times Square, one of the densest neighborhoods for food in the city, lost 33 restaurants, a 3 percent decline. The loss was felt more acutely in TriBeCa, which also lost 33 restaurants, representing a 13 percent drop.

The shift reflects a persistent change in the way many New Yorkers live and travel. The share of residents who work primarily from home has risen to 13 percent, more than double the rate in 2019, the report said.

“Clearly, people were spending more time and money where they live,” Mr. Bowles said.

A broad range of delicacies, with Mexican food leading the way

The new restaurants that emerged from the pandemic span a wide range of cuisines. But the biggest growth was in restaurants that served Mexican food, with 570 openings, mostly in Brooklyn and Queens, according to Live XYZ, a mapping company that worked with the city on the report.

There were also 469 new cafes, a broad category that includes a range of casual eateries, followed by 445 new Japanese restaurants. Then there were 331 restaurants that the company classified as a mix of Caribbean, Jamaican and Dominican.

Also popular were fried chicken joints, Korean and Thai restaurants, bagel shops and restaurants that catered to Halal cooking.

“I think we may have the most diverse retail mix in New York City in a long while, if not ever,” Mr. Bowles said, adding that, a decade ago, the list of openings would have been dominated by national brands, like McDonald’s. Those, too, have a strong presence in the city, but the restaurant franchises opening today tend to skew toward smaller operations, often with international roots.

Andrés Tonatiuh Galindo Maria, 30, is the co-founder of Nenes Taqueria, a restaurant that specializes in birria tacos, the saucy variety served with a spicy consomé.

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Mr. Galindo Maria and his mother, Veronica Lopez Maria, launched their taqueria’s third location, in Astoria, Queens, last month. Business has been brisk.Credit...Hiroko Masuike/The New York Times

In late 2020, during the height of the pandemic, he and his mother opened the restaurant’s first permanent location in Bushwick, Brooklyn.

Mr. Galindo Maria, who had toiled in kitchen jobs for years, had dim job prospects at the time because so many restaurants were closed. So he took a chance on a shuttered deli near his home, which the landlord was asking $2,500 a month to rent.

Luca DiCiero, the founder of the real estate firm NYSpace Finders, said the space might rent for $4,000 today.

“It was a no-brainer,” Mr. Galindo Maria said, adding that he quickly accepted the lease terms.

Two years later, after positive reviews, Mr. Galindo Maria and his mother, Veronica Lopez Maria, opened a second outpost in Park Slope. And last month, they opened a third location, this time in Astoria, Queens, where business has been brisk.

None of it would have been possible, he said, had the rental market not been depressed, and landlords short on options.

“It was a lucky moment,” he said, one he is unlikely to be able to capitalize on again, now that rents have risen, along with insurance costs and food prices. “I couldn’t do this today.”

Can the upward trend continue?

The growth in dining is encouraging, but not assured, said Andrew Rigie, the executive director of the New York City Hospitality Alliance, an industry trade group.

Restaurants and bars provided nearly 322,000 jobs in New York in September, a few thousand short of the sector’s prepandemic high, according to the Department of Labor. By comparison, the city’s fastest growing job sector, home health care, employed 309,000 people.

But jobs in the broader retail industry, which excludes restaurant workers, are declining, Mr. Bowles said. In September, there were about 292,000 retail trade jobs, a 15 percent decrease from the same month in 2019, in large part because of layoffs during the pandemic.

And there are signs that momentum in the restaurant industry could be slowing.

In a survey of 354 restaurant operators in the city, nearly three-quarters of respondents said sales were lower this summer than in the same period last year. Their biggest concerns were high labor costs, declining customers and onerous government regulations.

“Without restaurants filling our storefronts, we’d have many more vacancies, and all the societal problems that result from that,” Mr. Rigie said. “It’s important to nourish the restaurants that are nourishing New Yorkers.”

Stefanos Chen is a Times reporter covering New York City’s economy. He previously covered real estate in the city for over a decade. More about Stefanos Chen