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Broker of the Month: Question and answer session with Jacqueline Klinger, partner at SCG Retail
New York, NY Jacqueline Klinger, partner at SCG Retail recently sat down with the New York Real Estate Journal for a question and answer session.
What are the biggest changes you’ve seen in the business from when you started at Grand Central?
The market has changed so much. So many tenants in the market competing with one another. Quality of the retail, especially in the food category, has evolved and is so much better than it used to be. So many more healthy options now which is a great thing. There are more women in the business too, which is probably the most positive change.
You’ve worked with a lot of restaurateurs over the years from L’Entrecote to Maysville to Daniel Boulud to Sugarfish what drew you to food, and what’s the secret to finding the right place for a new concept?
I started in the real estate business working on leasing the dining concourse and restaurants spaces for the restoration of Grand Central Terminal. From a personal perspective having grown up in Manhattan, I was always interested in restaurants and good food, but from a real estate perspective, food really drove the action and it still does. Look at what is happening in the fast casual sector and all of the high-end, well curated food halls and specialty food events that are everywhere. We are in an era where celebrity chefs and high-end grocery stores like Whole Foods make and/or change a neighborhood or project. This is a city of diners with an incredibly refined palette.
How did you end up bringing Sugarfish, one of Los Angeles’ hottest food concepts, to New York?
I actively track new food concepts in certain cities, and I spend a lot of time in LA. I was fortunate to be introduced to owners and after spending some time with them and visiting all of their locations in Los Angeles I had a good sense of what they needed and where they should be for a first location in New York. When the site on 20th St. became available, we jumped on it and at first we were not the landlord’s first choice. We worked really hard to impress upon the landlord how special these guys were and eventually we got there. We introduced the principals which I always find to help move things forward and we were able to figure it out based on the tenant’s reputation. The deal took the better part of a year, but we were committed on both sides to figuring it out.
How are the high rents in New York City affecting restaurants today? Where do you see things shaking out for the rest of the year?
Rents for good restaurant spaces in strong trade areas have been too high for years now. Aside from the fact that restaurants have never been able to be the highest rent payers, there is a significant new challenge with the wage increase and operating costs for restauranteurs. The restaurant business is not an easy one and when landlords are asking millions of dollars for spaces on side streets, it is very hard to get deals done. It will be increasingly more daunting for restaurants, even the great ones, to make it in this market. It takes a lot of work and thought to get a deal done that works in the long term for both landlord and tenant.
You helped devise Papyrus’s New York Metro entry strategy, today they have over 20 locations in New York, all of which you handled. How did the location strategy evolve over that 15 year period, and what’s going on now with Papyrus?
I have been doing the real estate for Papyrus for almost 15 years and they are one of my favorite companies to work with. It is a family business and I deal directly with the CEO and COO and as a result I have a clear line of communication with the decision makers. They know what they like and they know what works and that is an absolute pleasure.
As for the continued expansion, I believe we can do many more stores in New York. They are a service, very much like Starbucks, in that they give the everyday consumer a personal and elevated experience. We have been finding a lot of success with smaller stores like at TurnStyles and 1291 Lexington Ave. We will likely continue to expand with the smaller format.
Jacqueline Klinger won REBNY’s Deal of the Year in 2013 for the Whole Foods deal in Harlem. She grew up in New York City, has two young children, Eli 3, Caroline 2. She spends her free time enjoying them and brings them to the office whenever she can.
Original article appeared here.