Shopping Center Business is the leading monthly business magazine for the retail real estate industry.
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NEW YORK ROUNDTABLE 68 • SHOPPING CENTER BUSINESS • December 2016 concept. They want the lease line to start at the entrance of the food court and then they'll redesign the entire thing, master lease it, and they'll tell you that they'll give you Chinese, Japanese, or whatever, and not do it in the traditional, in-line food court manner. They are young, up-and- coming restaurateurs that have likely had a handful of one-off locations. They've taken their collection of five restaurants and developed it now into a food hall concept. It's a little different. The oth- er trend that we're seeing with any new development is that 40 percent of GLA has been geared to restaurant and what I'll call entertainment — the bowling con- cepts, that kind of venue — on all ground up construction that we're doing in the retail sector. It's not retail alone. Andy Graiser: Are any of you seeing any concern with the ripple effect from the increase in minimum wage and overtime? We're starting to hear from restaurant guys that are calling us. One of the con- cerns is you've got the dish washer at $10 who is now going to go to $15, and you're going to have the assistant chef that was at $15 who will go to $20, and it just keeps going up. How do you offset those costs? Nina Kampler: In the restaurants at Newark Airport, the iPad is replacing the person. You order and pay by the iPad and a person brings you your order. Ten years ago I was at Potsdamer Platz, and it was the first time I saw how everything was done not really handing the credit card to the person at the machine. The orders were placed and everything was processed, and someone brought goods to you, but other than that you skipped the other stages. It's clear that this is the baby boomer and the millennial dollar, but what's remarkable to me is that ap- parently in 2015, restaurant sales were the number one category at 15 percent [of sales], and that's an enormous num- ber. It surpassed grocery stores — grocery stores were second, and then everything else gets increasingly smaller. Clothing and shoes are like 6 percent. Restaurants are almost triple apparel. David Rabinowitz: What's the overall reason for adding food and entertainment? Is it because developers are trying to make their projects exciting? People think that restaurants and entertainment do that, and there are fewer traditional retailers to fill up space. I think that's the reasoning behind it and why that's happening. The question is what happens in the future now? SCB: We produce a conference called En- tertainment Experience Evolution in Los Angeles in February that hones in on that. We get over 400 top-level executives from all aspects of retail real estate. Everyone is talking about restaurants, entertainment and creative retail. Every owner is looking at 'what can I do to get the consumer to come, enjoy himself, bring his or her fam- ily, come back and spend time?' This in- cludes the retailers as well. The entertain- ment aspect of the business is extremely important — particularly today because