Hamptons 2023 Restaurant Space Marketplace Heats Up

The summer of 2022 brought a whole new lineup of successful eateries to the East End of Long Island. The Hamptons sizzled as restaurateurs from Manhattan and across the nation brought notables including the Lulu Kitchen & Bar (Sag Harbor), East Hampton’s O by Kissaki, and Calissa Hamptons (Water Mill). Once again, the center of the Summer ’22 dining universe was set in Southampton with a trio of favorites that all found success with Manna at Lobster Inn, Tutto Il Giorno South and Dopo Argento. 

With that success in focus, Total Food Service set out to get a read on what the opportunities look like for the professional restaurateur/chef in the Hamptons for the Summer 2023 season. To do so we chatted with Hal Zwick, Director, Hamptons Commercial Real Estate. For 20 plus years, he’s been matching landlords and the restaurant professional with a goal of creating a unique dining opportunity for the throngs of discerning dining patrons that second of Long Island’s Eastern end. 

As life returned this summer to a “new normal, what types of trends did you see? 

While there is an increase in year-round population – 10-15% and year-round weekend population – 15-20%, we are returning to near pre-Covid business levels. Weekday business will continue to be slower than 2020 and 2021 and business drops off each week after Labor Day. While the Fall is still very strong, the Spring gets off to a slow start. And staffing will continue to be an issue going forward impacting restaurant schedules.

Are guests looking for a more formal or casual experience?

Generally, a more casual experience — but they seek out the site with better food and service. 

How much growth was there in square foot pricing from Summer ’21 to Summer 22?

Significant, probably 20% for retail. However, restaurant operators have been reluctant to accept high rent increases since their food and labor costs have greatly impacted their bottom line. 

There’s concern throughout the industry with labor challenges both with shortages (no more visa program) and the advent of the $17 an hour dishwasher?

All labor costs have increased and unfortunately, it has been reflected in pricing. The restaurants for the most part do not want to sacrifice quality and must pass the costs along to the customers. Another factor on the East End is housing. A good percentage of operators need to provide housing – seasonal and sometimes year-round to acquire and keep staff out here. This impacts costs even further.

As you look at the “early ’23 market”, are most of your seasonal operators re-upping for ’23?

There are not that many sites available right now, but operators are very cautious about coming out to the Hamptons based on the cost of doing business out here and the still seasonal nature of the locale. We have seen an increase in demand for take-out locations — labor costs are lower, and the profit margins are higher.

What’s your read on the type of inventory that you have to offer to date?

We have had a few “off-market” locations that we have been able to sell quietly. There is not much available but we have one very high-profile Southampton Village entity that we have significant traffic on.

I also notice that operators that succeed in the Hamptons understand that you just don’t replicate what you did in Manhattan or Miami?

This is true – their menu offerings are geared to the season, and sometimes they offer a smaller menu allowing the kitchen to run more efficiently and to keep food costs down. They also are very creative with the drink offerings, especially in the key season. Those behind the bar play a larger role in the restaurant’s appeal and bottom line.

How can the Compass team help an operator find the “right play” in the Hamptons? 

Being the largest commercial team in the Hamptons and having been an exclusive commercial broker for over twenty years, we know the players, know the sites, know the local zoning laws and can find “off-market” locations, work in confidence and pre-screen prospects for landlords and sellers. Compass’s marketing and targeting capabilities allow us to find the “right” customers for our listings. We also partner with our Compass Commercial agents throughout the NY metropolitan area and beyond to bring new and distinct prospects to our clients.

To learn more, visit the Compass Realty webpages for Hal Zwick

The post Hamptons 2023 Restaurant Space Marketplace Heats Up appeared first on Total Food Service.

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