By Holly Dutton
The owners of a fast-growing frozen yogurt chain believe they have the retail market licked after signing leases for space in some of the city’s hottest neighborhoods.
Joshua Heller and Gregg Heubach, co-owners of the new Off the Wall chain of treat stores, are gearing up to open at 11 Times Square, the brand new office tower in the heart of the city’s throbbing tourist mecca.
In the past two years, the pair have also opened stores on 2nd Avenue between 55th and 56th Street, 4 West 14th Street near Union Square, and 248 West 23rd Street in Chelsea. They opened their first location in Cedarhurst, Long Island.
After extensive foot traffic research and searching for the right space, the duo signed a lease at 11 Times Square last November for a 2,500 s/f ground floor space that is part of the lobby. The location is expected to open within the next couple weeks.
“Most yogurt is not able to get in Times Square,” said Heubach. “It is a $5 product; you can’t pay $40,000 a month rent and sell frozen yogurt, it just doesn’t work.
“Part of the difficulty was we didn’t meet with landlords face to face,” said Heller. “We went through brokers. Once we were able to meet with them and tell them about our real estate backgrounds they were much more comfortable.”
The two first met at NYU’s Schack Institute while pursuing master’s degrees in real estate. They formed H&H Real Estate Partners, a company that does independent party evaluation for private equity funds and institutional investors. “Basically, we integrate statistics into cash flow models,” said Heller.
“We researched yogurt chain for a year prior,” said Heubach. “We liked the yogurt business. We weren’t the first to the gate, but we liked the retail model and wanted to diversify into it.”
The company, which works exclusively with RKF, looked at more than 300 locations in the city before finding their first spot at 1053 2nd Avenue in Midtown East.
Of the company’s four Manhattan locations, most range from 1,200 s/f to 1,700 s/f. Price per square foot ranges from $100 to $130.
“The ideal frozen yogurt location is 1,200 s/f with a basement,” said Heller. “You get larger, it starts to get pricey in rent.”
The two are looking at the Upper West Side for future expansion, and are also fans of the West Village, East Village, Soho and Brooklyn.
“We’ve expanded rather quickly, but we’re trying to open three to five more locations over the next year and a half,” said Heubach. “We don’t want to open right next to a competitor, the market is saturated. We’re trying to strategically plan location away from competitors.”
In looking at potential locations, the team tries to think ahead of the pack. “We try to find locations that right now aren’t home runs, but doing our due diligence and using our real estate knowledge, we know in three years’ time will become a hot location,” said Heller.
Heubach said that the company will not be franchising, choosing to own and operate each store individually.
