The Slurpee slingers at 7-Eleven are expanding aggressively in New York City, and plan to make their distinctive green and orange storefronts ubiquitous throughout the five boroughs.
The world’s largest convenience store chain signed 18 leases in Manhattan and 10 in the outer boroughs in 2011, according to the company. It plans to sign 20 leases in Manhattan and between seven and 10 in the outer boroughs each year in 2012 and 2013.
“Our real estate strategy is to achieve market concentration and be the convenience store of choice for all of New York City,” Margaret Chabris, the company’s director of corporate communications, wrote in an email.
Ariel Schuster, Greg Covey and Harrison Abramowitz of RKF are representing 7-Eleven in their search.
The company’s leasing success to date is a sign of real estate muscle, according to brokers.
“It’s very impressive. From the perspective of finding a location, negotiating a lease, it’s impressive,” said Joanne Podell of Cushman and Wakefield.
The company is looking for spaces between 1,500 and 3,000 s/f, according to Chabris, and while lease terms can vary it typically signs for 10 years or less.
“The smaller local landlords might find if a little daunting because of the kind of leases these guys expect, but the more savvy landlords should welcome 7-Eleven,” said Podell, because the company is a well-financed tenant that usually seeks less-than-prime locations.
But will the chain of convenience stores, based in Dallas but a wholly owned subsidiary of a Japanese company, appeal to the tastes of New York City?
The jury is still out, said Jeffrey Roseman of Newmark Grubb Knight Frank.
“The key for successful chains to make it in New York is to embrace the city, and not put in the cardboard cutout stores they may have 2,000 of everywhere else,” he said, adding later, “you can’t just bring the box in that’s in Omaha, Neb. and place it on Third Ave.”
Whole Foods, Chipotle and Starbucks are examples of large chains that have adapted well to New York’s urban environment, Roseman said, while he has found the esthetics and build-outs of 7-Eleven’s Manhattan locations so far to be underwhelming.
But name brands can draw customers, other brokers observed.
“An awful lot of suburbanites move to the city every year when they graduate college, so they have a ready-made market in that sense,” said Steve Rappaport of Sinvin Real Estate.
The consistent, predictable product of a chain appeals to consumers, Rappaport and Podell both observed.
7-Eleven has a good chance of succeeding, Rappaport said, “as long as they hold back on the size of the slushies and Mayor Bloomberg lets them exist.”