Polpettina in Eastchester, NY with Kyle Inserra
Guest: Kyle Inserra
Topics: Polpettina,
Transcript:
Chris Ressa 0:02
This is retail retold the story of how that store ended up in your neighborhood. I’m your host, Chris Ressa. And I invite you to join my conversation with some of the retail industry’s biggest influencers. This podcast is brought to you by DLC management.
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everyone Hope all is well. Chris record here I’m on the Amtrak train on my way down to Washington DC from Newark Penn Station.
Today, on retail retold, we have Kyle and Sarah from CBRE. Kyle is a restaurant broker with a really interesting career path. And I’m excited to bring him on the show today.
Before he was a restaurant broker, which is a pretty new career for him. He was a restaurant tour. And before that he was a chef, a career path we don’t see that much. And I think he brings a unique perspective to the industry and a unique perspective to this show. And I’m excited to have him on today. But before we go there, I wanted to give everyone some perspective, I’ve been seeing a lot of things out there on social media about people trying to educate themselves in their field of choice, and people are digging in. I think that’s great. One thing that I think would be extremely helpful to people is to spend time networking, educating themselves with people outside of their industry. Sometimes we get caught in our own industry and our own companies and our own business. And we lose perspective. We miss on trends, we can’t be innovative. One of the ways that I try to stay fresh is to connect with people outside of my industry. If you’re in retail leasing, sales, you’re an investment sales broker, talk about what’s going on to a pharmaceutical sales rep. Go grab lunch with one go grab lunch with the sales rep for some major corporation, find out what they’re doing, how are they handling things? What trends are they seeing from buyers? If you’re an entrepreneur in retail, connect with an entrepreneur in a different business category, some manufacturing or distribution, see what’s going on in their world. How are they handling challenges and problems? You will be fascinated if you spend some time after a couple months of doing this at the ideas you can bring to the table. It’s great to network in the business. In your own business. It’s great to network in your company. Read everything you can on your own business that will help propel your career. But around the edges, spend some time with people outside of your business and I promise you will gain some insight on trends ideas, and be able to innovate like you haven’t before. Thanks for time today. I hope you enjoy the show everyone.
Welcome everyone to retail retold. I am excited today. Today we have Kyle Inserra. Kyle is on the National Restaurant broker team for CBRE and it’s a really cool platform and I’m excited to have Kyle on the show. Welcome to the show. Kyle.
Kyle Inserra 3:52
Thanks for having me, Chris. I appreciate it. Very cool.
Ressa 3:56
So you are a you specialize in restaurant brokerage and, you know, the restaurant industry is, you know, grown over the last decade. So, how did you get into specializing in restaurant brokerage? How did you end up where you are today? So I spent
Inserra 4:17
about 16 years professionally working in the hospitality industry.
You know, everything from, you know, basically as a teenager, I started working in the restaurant business, I graduated college, I thought I was doing the right thing and I worked down Madison Avenue I worked for an advertising agency that worked for Prudential securities doing
financial advisory stuff. And then after 911 I was like, I don’t want to do this. This is not what I’m cut out to do. I’m not interested in it. I don’t love it. And I enrolled in culinary school so I went to the French Culinary Institute. And I spent 16 years working in the hospitality industry as an executive chef as a food and beverage manager. As an owner
operator, so about two years ago,
I left my restaurant that I started with my partners. And I got my real estate license. And here I am.
Ressa 5:15
So you were, what was the restaurant that you left?
Inserra 5:19
So I started with my money, a concept called Papa Tina here in Westchester where they are two locations. East Chester and in Larchmont and yeah, I mean, they’re still rockin and rollin.
Ressa 5:31
And what kind of food is Paul patina?
Inserra 5:34
There? You
know, we were there’s quite a few of them now. And we opened in 2009, I think it was. And it was a basically a leveled up pizza and pasta place. We kind of wanted to make a place it sounds silly, but a place where people actually wanted to eat that wasn’t overly conceptualized. No. So take those basics that you would get at a really a strip mall slash join, and just level it up. So my partner had worked at a lot of high end restaurants, a lot of high end Italian restaurants. And then my background coming in having won some operational stuff, basically bootstrap the hell out of it and launched the first location in East Chester in 2009.
Ressa 6:12
And what were you doing in between? You’re in between when you decided you wanted to get into hospitality after you graduate? culinary school, what do you do between there and pulpit Tina.
Inserra 6:23
Um, so after I graduated culinary school, I really just kind of kicked her out everywhere I worked in the city, I was an executive chef. And I basically worked my way up from line cook to executive chef pretty quickly. I worked in Hoboken. And then right before we started, patina, I was a executive chef and food and beverage manager for a restaurant group in the US Virgin Islands in St. John. So I was there for about three and a half years. And that’s actually where that concept was born. My partner and I came up with a just like this
over and over like a FaceTime.
Ressa 6:55
If I put you on beat Bobby Flay, what is your specialty? What dish Are you bringing to the table that you do better than anybody?
Inserra 7:06
I’m very simple. So I grew up in a Sicilian household playing pasta and you know, some great homemade sauce will do it for me. But that’s not going to cut it for me against Bobby Flay. I just very radiant, you know, I don’t know, I like to just kind of come up with things on the fly right now. I’m feeling like a very Asian eat Thai kind of food thing with like, lots of herbs and lots of texture. So I don’t know. But I would love the opportunity, that’s for sure. A lot of fun. All right. The rigatoni with marinara is not going to do it, but I can I can come up with it
depends how good the rigatoni is.
Yeah, exactly.
That’s a good point.
Yeah. The so you leave pulpit Tina,
Ressa 7:46
was it contentious leaving is was it
Inserra 7:51
it was very contentious, you know, you know, partners are meant for dancing. I don’t think they’re meant for restaurant business. You know, it was a lot of finger pointing, got ugly lawyers got involved. But at the end of the day, you know, I really am a
big believer in that you. That kind of stuff is a lesson.
And I think that in life kind of teaching things I was ready to move on but didn’t couldn’t really figure out how to get out of it. So when it got contentious, it was like, Okay, this is my way out, and I can figure out my next move. Now it’s a shame. And you know, I really hope that everything, you know, all the success in the world, to them, it’s just a, you know, business things, not a personal thing. But for sure, you know, the partnership stuff was thinking it wasn’t a good breakup. But
in the end, it was a lesson learned. What was the lesson, um,
really do your homework on your partners, you know, and really have a clear understanding of who’s doing what in the business and the expectations you have for one another. I think that, um, that coupled with not necessarily being on the same number, we’re on the same path, we want to understand exactly what the clear cut future was, we’re throwing a lot of stuff at the wall and hoping that it’s stuck and, you know, winning kind of fixes everything. And we were very fortunate enough to grow from literally $0 in our account to a four and a half million dollar your restaurant
in a very short period of time.
So what things are going well, everybody’s all good. And then you started little bumps in the road, and then you start to see the cracks in the armor. And that’s kind of what happened with us. So I’m sure they’re, I mean, it’s proven that their restaurant partnerships that work, but I think it’s a clear delineation of who’s doing what, what they’re expected to deliver on and what they’re not expected to deliver on.
I think that’s really where we went wrong. Makes sense?
Ressa 9:44
Not the first partnership that fails won’t be the last but glad you learned some lessons along the way. Yeah, and you
Inserra 9:51
know, I really now I think, as it relates to what I do now is I just have a real soft spot for those people because I know what goes into You know, borrowing money from your family from your friends, or you know, taking a loan out against your house, and then you know, the amount of work that goes into it. So, I would like to be there, as you know, more than just, from a real estate perspective, from an advisory perspective, in terms of, you know, you don’t want to be here like, well, where you take the garbage out here, or this neighbor doesn’t look like he’s gonna be too friendly to you. Have you thought about that, you know, there’s no train near here, where’s your staff gonna come from, you know, things that you don’t necessarily think of, or maybe you just need a sounding board for I think, you know, in the grand scheme of things, one led me to another. And
Ressa 10:38
you pivot, that, that partnership dissolves, and then you pivot to real estate, why real estate, there’s a lot of different avenues, you could open up another restaurant, you could have gotten to a different sector, why real estate? You know,
Inserra 10:51
I was always drawn to real estate I had invested in real estate. I was interested in the process. When we were expanding, you know, I learned a lot on the fly, like, what’s an LOI? What is, you know, what is Ti dollars? Why are they giving us money, where’s the money, why we don’t see the money, like, I learned a lot from that. And I just started to get started learn more about it. So right, when we were sort of dissolved in the partnership, and things were getting nasty, we were actually in the process of looking at a third location. So I was essentially doing what I do now, you know, along with a broker by my side, and we were trying to navigate that I learned a lot from her. And, you know, when I had a chance to let the dust settle a little bit and figure out what my next move was, I realized that the restaurant industry is a grind, I’d spent 16 years head down in the business the last 10 As an operator, which you know, when your life you know, in your life, but your your your career, and and the amount of money you take home is dependent on your actions every day in and out of the restaurant, and kind of comes home with you, it’s very stressful. And if you don’t know how to manage it, it can really eat you up. So
I thought I was doing a pretty good job. But when I
left that partnership and lifted my head out of the sand, it was a real eye opener to some opportunities that were there. And it just seemed like a national natural progression.
You
Ressa 12:16
You mentioned before, you’re on the National Restaurant team. And I speak to a lot of people on the restaurant brokerage side for on the real estate restaurant brokerage side. And there’s some groups who are individuals who work on a national platform they take, they’re taking, you know, they’re working with a restaurant, and they’re trying to scale them nationally. And there’s groups that are focused on a specific geography. Are you focused on the geography? Or are you focused? And are you focused on taking one restaurant and in all markets?
Inserra 12:55
So I’m, I’m new to the business, right? So I’m leveraging my experience to get any business that that I can provide, you know, my level of service to the local operators, because that’s my market. That’s where I am. I’m on a team with and I’m sure, you know, maybe an hour but Jessica Curtis, who’s actually kind of led me into the she was working with us when we were part of what patina, and how I kind of really started to have these seeds planted in my head. But right now, I’m focused on Westchester and Fairfield. But ultimately, my goal would be to work more nationally, and I’m taking steps to do that this year. So but it has to start somewhere. And just knowing my connections that I have here, I’ve been able to cultivate
a nice little community. Totally.
Ressa 13:44
Yeah, I, we found you, because you’re killing it on social media right now. And you got a great social media game, and you’re putting out some thought provoking stuff. And I think that’s partly because of, you know, your unique background, you were an entrepreneur, a restaurant tour, and now you’re leveraging that into helping other restaurant tours. And I think that having that firsthand experience is definitely going to pay dividends. There’s some credibility there that a lot of folks don’t have.
Inserra 14:14
Yeah, that’s the goal. Yeah.
Ressa 14:17
But a lot of that’s dependent on what’s going on in the market. So what is the state of the restaurant market today?
Inserra 14:23
You know, I’m,
I’m equally like concerned but excited at the same time, because for the mom and pop, or the one or two unit operator, like the local people that I speak to, they’re kind of a little bit grasping at straws, right? They’re like,
Should we make meal kit?
Should we use GrubHub? DoorDash and UberEATS? Or should we just use one? Should we cater to the plant based people you know, there’s a lot of a lot of new things coming up the restaurant industry and trends are always there, but it seems like more so than ever. There’s more to consider and it’s more a business than ever. And I think the operator has to be more than just a chef or more than just the general manager, you have to be able to really assess your business from, you know, from a p&l standpoint, from an operational standpoint and place it in the current culture, because
I think you’re also now you’re competing with,
you know, when I came up in the restaurant business, you’re competing with fast food chains, right, you’re either gonna go to fast food, or you’re gonna go dine out in a restaurant. And now there’s that middle ground of the QSR is like the sweet greens and the dig ins and all that stuff, that are real competition, and they’re at a lower price point. So I think like anything else with a shakeout like this, this is going to present a real opportunity for restaurant owners, for the good operators. But it’s going to be sticky for the guys who have been scraping by with an older model. You know, there’s a part of me that thinks that there’s maybe this resurgence of the white tablecloth restaurant, right, because now there’s like, you know, that this huge white space for dining out like the maitre d service, sit down bread and butter table?
No, that’s,
I think we’ll always need restaurants like that for anniversaries, for birthdays for engagements Valentine’s Day, but it’s definitely a transition period and tougher to navigate than ever. If you were to boil
Ressa 16:13
it down to you know, one thing, what is the one? Challenge? What is the biggest challenge restaurant tours in particular, you know, local, regional restaurant tours are facing to that,
Inserra 16:26
like from an operational standpoint or in the landscape?
Ressa 16:29
What, however you want to take the question,
Inserra 16:31
you know, I think if I put
my ownership hat on, I think the biggest concern is still a staffing. You know, I think the gig economy is cutting into the restaurant staff. So these 16 To 20 to 25. To plus restaurant people now, are people who were considered potential restaurant employees are now looking at Buber, eats the Postmates, the Grub Hub and say, Hold on a second, I can make $250 a night driving around my car dropping off food, I don’t have to go and I think that’s cutting into the workforce a bit. So that’s a major concern. And I think overall, the the the environment, you know, the environment, I think you have to be, you have to go with your gut. And I think you have to basically stick to what your concept was when you when you came literally constantly tweaking it. But it’s harder than ever, I think, to block out the noise of what you should do, you know, adding PLANT BASE, like I said, or should I just Should I just get rid of these waiters and put tablets at the table? You know, there’s a lot of things that restaurant owners have to consider. But, you know, I think the older guys are struggling who made it, you know, let’s say 2530 years as a restaurant, that models just needs to be tweaked. And they don’t have the you know, it’s a big wheel to turn for them at this point. So but I would say in general, so staffing is a major problem.
Ressa 17:55
Overall, would you
consider the restaurant industry healthy right now?
Inserra 17:59
I think it’s,
I think it’s thriving. I think when you say restaurant industry, there’s so many things under that umbrella now. Definitely thriving. I think what’s getting lost in the mix. And it’s unfortunate are those you know, I grew up on my own
and there’s like, strips of, you know,
dry cleaner grocery store, Thai and pizzeria and then like, adjacent to the pizzeria is a little restaurant. You know, they make like a little bit nicer of the pizzeria. I think in restaurants like that with a little neighborhood place that is not in a market that can sustain a real downturn. Like, you know, New York City has the volume of the major cities have the volume. But you know, somebody’s local Westchester towns where the mom and pop operators are, are, have been there for a while they can’t, they can’t really grasp the third party delivery stuff or why they should have an online ordering platform. I think they’re the ones that are going to shake out. But I think the opportunities are out there for restaurants who are doing the right thing and understand the market. I think it’s the best opportunity that
I’ve ever seen. In what’s the hottest
Ressa 19:05
style of food today like that what’s so on trend right now. I mean, it’s tough to say
Inserra 19:11
that it’s not plant based human. I just saw a report yesterday that it’s kind of dipping. But you know, I think somebody introduced me to a term called the flexitarian. So like people said, everything Yeah. It’s, it’s people who aren’t vegetarian or vegan, but they will they realize I shouldn’t be eating as much meat as I am. So maybe I’ll add a little bit more. So they’re taking up let’s say 30% of their diet into vegetables and fruits and, and plant based stuff. But so flexitarians are going to have an impact on menus. So, you know, I think there’s an onslaught of those documentaries about don’t eat meat, don’t
Unknown Speaker 19:48
eat meat, don’t eat meat. Yeah, I’ve seen the Netflix.
Inserra 19:51
Yeah, and the truth is somewhere in between, probably. So I think that’s gonna have a short term impact. But I still think at the end of the day, it comes down to making craveable food that you can produce at a cost that makes sense where you can make some money. You know, do people actually want to come back there two times a week to eat it. So that’s always gonna be the case, whether it’s plant based or not. I think it’s tricky to trace down, chase down the trends. I mean, remember ice bowl places,
I mean, they were hot, like 10 months ago, and now that kind of like a, you know, so I think it’s sticking to what, what a good operator knows. And just, you know,
somebody told me one time that you should be Mariano Rivera in the restaurant industry, you just have one, one thing and do it better than anybody else. So I like that analogy.
Ressa 20:35
I love that analogy. You know, one, one pitch that no one can hit. And I think that
some of my favorite
restaurants over the years have like such a small menu, right? They have, you know, seven, eight things. And they do it better than everybody. So I think there’s something to be said to be married on are there.
Inserra 20:57
I mean, I think that that
those giant menus are a huge turnoff. I think they’re phasing out, you know, the straight fastball concept places, veggie grills, you know, the feed the hello guys things like that are kind of clear and what they offer, this is what we’re gonna do,
we’re gonna bring it to you. And I think the numbers prove it. Your work today? Are you working with
Ressa 21:23
more sit down fast viewed? QSR? What are you? What are you working with today?
Inserra 21:30
Mostly QSR. You know, and and we’ll think that’s interesting. I never thought of it this way. But it’s mostly QSR on the tenant rep side. And it’s mostly traditional restaurant and landlords. I’ve in terms of this position, though.
That’s an interesting thing
to think about. So the guy said, they’re looking to get rid of the restaurants were more of a traditional restaurant model, and the people were in the market or more of a QSR model. So interesting. Yeah. I mean, it could could just be me, but the sample size, so
there you go. But yeah, I never thought about that.
Ressa 22:03
Awesome. Well, that was some good perspective on the trends that are happening right now. Give me a in a Twitter message of 140 characters or less, I’m gonna make it tough for you. And that’s all Twitter today. It’s 288.
Inserra 22:18
Yeah. Okay.
Ressa 22:21
What does the restaurant industry look like? 10 years from now?
Inserra 22:25
Oh, man. Can I get back to you? I mean, I think it’s a, it’s going to be a landscape of a completely
revised, like, revolutionize restaurant landscape in terms of how we dine out,
and how we order in. So I don’t want any characters on that, but
it’s going to be different than what we see. And I don’t necessarily think it’s a bad thing. Okay. It’s just different. And I think it’s gone
along the way, you know, he used to buy, you know,
baseball cards at baseball shops. Now will you buy them on eBay, you know, there’s just a lot of different analogies you can make, you know, buy groceries at the store, but now you can get them delivered. I think a lot all that stuff is, is playing in and I think the restaurant has always been the wild west for technology and innovation. And now, slowly since you know, the 2000s it’s been blown a little off, you know, celebrity chefs, multiple concepts, multiple units. And then, you know, you get kids graduating culinary school, out of the park right off the bat, and it just creates this community of there’s more you know, the chef now is a real job where back then, you know, when I was coming up was kind of like, sure you want to do this and it’s a real profession now and it’s giving people that creative landscape, it’s giving people the creative opportunity or the freedom to do things outside the box, the ghost kitchens, or the meal prep stuff, or the you know, the personal catering personal shopping. It’s just gonna be different. I think it’s just going to continue on that trend.
Got it. Alright, man. Well,
Ressa 24:04
why don’t you walk us through and tell us about a story where a you know how a restaurant ended up in a location that it did. So
Inserra 24:14
you know, it’s an interesting story because I always get asked and I can I can speak to it because it was mine. Was patina. It was it was if you live in Westchester, I hope you have heard of it. And a lot of definitely southern Westchester, people have been wildly successful. But it was a deli. And my partner and I were
Ressa 24:34
what town are we in Papa Tina? Where? Eastchester Eastchester. Okay.
Inserra 24:40
So, um,
it was tiny. It was eight seats, 10 seats and I flew back from St. John to look at the space with my partner. And you know, here I was working in St. John resorts, huge kitchen, sun, everything. I flew back here in January of 2008. And there was like, More feet of snow on the ground like some huge snowstorm happened. And I walked into this restaurant and it was
like 10 seats. And I was like, Dude out, are you serious, I’m gonna, this is gonna be the restaurant. And
we thought about it for a while, and then we started building it out. And you know, we, I learned a lot about zoning in that process, and what’s permitted use and what’s not permitted and how that should be checked before you commit to opening up a restaurant in a certain area. So that wound up there just really out of a guy out of desperation, was looking to get out from under his lease who was partners with my partner, and one of the concepts to plug in there. But the problem was, we weren’t allowed to do table service restaurant.
Ressa 25:45
How did you so the partner that you partnered up with? Is this an old time friend? How do you know this guy?
Inserra 25:51
So I met him? That’s a good question. And that’s also a reason why this story exists. But um, we were kind of like consulting chefs on a job out of Bridgehampton on Long Island. And he was leaving, and a lot of chefs kind of just talk and say, hey, you know, we should open up something together. And I was like, Yeah, sure, totally. And just didn’t think anything of it. And he was pretty persistent in that. Hey, this is there’s gonna be opportunity, I’m gonna let you know, I’m gonna let you know. And that’s kind of how it came to be was he had offered me a small piece of equity in the business to help him open it. And believe it or not living in the US Virgin Islands does get tiring? It’s, you know? So I was like, Yeah, let’s do it, it was my chance to move back to
New York, and,
you know, jumped at it. But we made a huge mistake. And thinking that we could just jump in there and do what we wanted, without confirming the universities that were allowed.
Ressa 26:47
But backing up for one second. So just to unpack this. So you meet this guy, this guy, he’s a chef, as chefs probably do makes a lot of sense. You guys are like, we’re gonna open our own restaurant one day, forget all working for these guys. And you were like, Yeah, you take a gig in the Virgin Islands, you’re on a boat, you’re you’re, you know, having a good time. But you’re a little tired. He calls you up and says, I have this opportunity. So you come back. And it was a deli, that he was already a partnering with somebody else.
Inserra 27:20
Yeah, it was
somebody who was partners with what but they were definitely friends. And there was some relationship there that allowed him to loot me into this partnership. And we did it all the right way. Which that was another good lesson as partnership agreements, and make sure you have employment agreements all buttoned up, because you never know which way it’s gonna go. But
yeah, that’s
Ressa 27:41
so and then. And then you guys are going to try to bail this deli out how much? How much term did he have on his lease left?
Inserra 27:52
He had a good amount of term.
I mean, that’s another thing we did was a an assignment. And it was an assignment from him. That was an assignment from somebody else. That was
a huge mess in terms of the lease, I remember. And we eventually got a new lease, after we
walked story, bought out that original partner when we formed the new company, we got a new lease, but yeah, we really just helped get this guy off the hook. But it was, you know, it wasn’t cheap. We paid above market for sure. And, you know, again, I think we were just fortunate to really hit a home run there, and the town loved us otherwise, we would have been another statistic.
Ressa 28:30
So the deli owner, you guys pay him. And he’s out. Now you own this deli, and you have to turn it into a restaurant. But at that point, and you mentioned new lease, does the landlord have to approve you as an assignee? Yes. And so were you presenting your business plan to him and what you wanted to do. Was there any issues with that? Or was he excited for a new concept to come in?
Inserra 29:00
So the guy that we were partners with was not really an operator, he was just kind of the money guy and the guarantor on the lease. So I can unpack this now for myself, because I understand it a little bit better. But the deli guy, the operator guy, he left. Yep, the one guy stayed there and was on the lease for a period of time until we bought him out and formed a new company with our new partner and got
a new and new LLC and a new lease.
Ressa 29:25
Okay, and so you say new lease, so that that means the landlord was open to ripping up the old lease that you had bought from this guy in giving you a new lease.
Inserra 29:36
Yeah, he loved I mean, the line was out the door. It was around the block. I mean, we were we were 10 seats, and we were doing staggering numbers and with no delivery that there was before UberEATS GrubHub and all that stuff, so he was happy to just see some life in his building.
Ressa 29:52
And did the rent change or anything like that?
Inserra 29:57
No, the rent stayed the same. But what was interesting thing was there was an adjacent space, there was a former liquor store that, you know, everyone’s like, why don’t you just take the space, take the space. And we have plans drawn up, and we did everything. And, you know, there’s a whole other podcast, but long story short was we did the build out plans were approved. And then after finally opening, they came in and said, Okay, wait, you know, actually,
you can’t, you can’t serve food here. This is zoned retail. Not zoned for food use this side. Another
long story short was after about $40,000 and legal bills, we found out that it could be converted to restaurant use based on the code. But it didn’t want it to because it set a precedent in the town of people combining what is the restaurant space and a retail space and essentially very small. So that can have an impact that would resonate with them for a long time. So I kind of now understand why they were hesitant to do it. But it was really rough at that time, because
Ressa 31:01
so you have to get a variance, I’m assuming that’s what you had to do. And sometimes use parents. And sometimes they may have to change the actual code for that to happen, which is a big deal for them to do. And it sets precedent for everyone else. So they’re usually hesitant to do that. And to make that happen cost you 40 grand and in legal to make that happen. And they shouldn’t.
Inserra 31:23
And they actually since changed it
because of that, because it wasn’t crystal clear. And it wasn’t fair to us. And it wasn’t fair to existing operators, there’s too many subcategories in a town the size of a postage stamp, that made it almost impossible to really open up anything if anything else was, you know,
previously in that space. So they’ve sent to change it. And so
Ressa 31:46
you learn some valuable lessons, you know, you gotta you gotta buy out an existing guy, you created a new LLC, you get a new lease, the landlord’s happy with you. You know, it’s what a lot of people may not know, on this podcast is, when you’re, as you’re going in to buy a lease, and you’re buying that from somebody else, what could happen is oftentimes the landlord has a say in that weather, because, you know, if you’re a landlord you signed up to, to have in your space, you know, Joe’s deli, and now Joe’s deli is not there and you’re gonna get pulp patina. It’s like, well, what if I didn’t want to have pulp patina in my space, or Palpatine is different credit. So they have to approve that. After you make a deal, the landlord typically has to approve that so they approve that not only do they approve that, they everyone thought it was a better idea to just rip that lease up and, and create a new lease. And you guys sign how long of a term did you guys sign
Inserra 32:50
1010 years with a five year option.
Ressa 32:52
So you sign a 10 year lease. And not only do you sign a 10 year lease, you are going to expand in the space next door and you get your building permits and all that stuff. And you spend all the money and build it out. And then after you build it out, the city goes, Oh, we totally forgot. You can’t sell food here. Right? How much did it cost to build it? How much did it cost to build this out?
Inserra 33:16
It costs about another 100 grand to build that the space. It was adding 40 seats. So we went from basically 10 seats to 50 seats, which is a huge game changer and the rank was marginal increase. So he was yeah, this vacant store with painted black windows for six or seven years.
So he was happy to do something there. But yeah, I mean, to your point. All of those lessons that I learned there, you know, I’m actually partners with us
in a small restaurant in Larchmont
taqueria concept that we launched
a lot to Korea and my partner’s you know, your restaurant or your emotional like, why would they want us we’re great. You know, and I have to explain to them like, Hey look, you’re gonna need a grease trap here Now where’s the hood gonna go? You know he’s gonna have to worry about all this garbage. So yeah, he’s gonna consider it but it’s not so cut and dry. So you know those kinds of things. And those lessons learned aside from leaving the zoning stuff which I learned the hard way is just being able to apply that just that experience just that year of contractor meetings, zoning board approval lawyers LLCs bank you know funding financing was a real crash course in restaurant ownership.
Ressa 34:30
Yeah, I think that the punch line there and whether you’re a restaurant or any other business on that zoning pieces uses get changed all the time and it’s happening you know, at an exponential rate in commercial real estate right you’re seeing total different uses getting put up you know once was in an industrial factory is now a you know multifamily which once was a an enclosed mall is now a warehouse and what once was a, who knows is now an office building retail center restaurants. And so uses are changing all the time. And I think the punch line is you don’t spend that 100 grand until you get the use change, right? I don’t I don’t think people should be scared about the opportunity where you might have to go through the fact of getting a variance. I think the prudent thing typically, though, is maybe we don’t spend 100 grand until we get that because if they didn’t approve it, you would be you know, you’d have to make some decisions, right? We’re not selling food. We’re gonna guys, we’re gonna be in the t shirt business in about five minutes. Students free clothing.
Inserra 35:42
Well, yeah, I mean, I think. Absolutely. And I think and you can maybe attest to this, but it seems so it seems that the case now is landlords are more agreeable than ever to food. You know, you said,
I mean, just from my experience,
it’s been like, you know, is it okay to put a restaurant here? Is it okay to put a restaurant here? I would say 95% of the time people Yes. Landlord will allow restaurant, you know, you’re gonna have to build out the hood. And then it’s a matter of, can we punch through the roof? Or you can go out back? What’s the shortest line? But it seems like they are, you know, that they’re more open to that than ever. Yeah,
Ressa 36:16
I think, listen, there’s no secret that restaurants have been a growing use category and shopping centers. I think one of the things that in for all those restaurant tours out there that landlords are cognizant of is, you know, we’ve always heard this, this, the stats of you know, how many restaurants actually fail. Right. And, you know, there’s way more restaurants that fail than succeed that start up. And I think the operator and the conviction around the, the business and the protection a landlord might want in the in the event that it doesn’t work is critical, because the only thing worse than a vacant space is a space that turns over frequently, it gets that stigma that Ooh, you can’t make it in that space, no matter who you are, what you do. And so landlords are cognizant of that. And you don’t want to take too many shots and roll the dice too much, even if there’s a low cost, because the reputation and brand of that space gets tarnished. And so as a landlord, you better be sure if you’re putting in that new hip restaurant concept that it has staying power. And if it doesn’t, then you better be protected on the back end of somehow, whether that’s a guarantee or you know, you know, whatever, it might be a letter of credit, who knows, but you better be protected. Because at the end of the day, you know, vacant spaces are tough. spaces that turn at a consistent pace are challenging. I mean, every
Inserra 37:56
town knows that one space that looks like it’s so prominent, but then you’re like, Why does nobody ever make it better? Yeah,
Ressa 38:01
if you get that you’re, you’re in a pickle. And so I think when you mentioned do landlords want food? I think we want the right restaurant operator.
Inserra 38:11
Yeah. And I think that, you know, they’re betting on the jockeys, I think for sure. And you’ll hear that from landlords, you know, give me give me sweet read me Chipotle in here. Chick fil A, okay, well, sometimes there’s not a fit, but that’s their mindset. And I think that’s actually, you know, our job. The team I’m on our job is to and particularly me to have those conversations with restaurant tours, in terms
of this is what the landlord’s thinking, you know, like,
he just had a an Asian place in here that didn’t work. And now you’re coming at him with the same thing, you got to understand where
he’s coming from, he’s
invested all this money, he’s now you know, looking at a year later during this process again, so those conversations are real, they happen all the time. And I think
that’s actually where my role is. value. Because, you know, some restaurant owners,
they do what they do really well, but they don’t really like to feel like they, they’re not in the know, and they’re being forced some information or it’s coming at them and they have to learn this whole new language. So I think being able to talk to them on a one on one level as it pertains to what the landlord’s issues could potentially be is you know, you have to you have to do and you have to do in a way that they completely understand and don’t let ego drive their decision making.
Ressa 39:23
Totally
I think one of the things it’s always important that the listeners is getting a frame of reference on how long this took so from the the day you got off the plane from the US Virgin Islands to the day patina opened up its doors. How long was that?
Inserra 39:43
Um, so the first the the eight seater part was pretty quick. I think we opened up in the end of March or April, so they it was January and they’d already started gutting the place and there wasn’t much to do because it was so small. But the other side It was six months, seven months. And then the Larchmont location was the standard line all should take three or four months. And it took us about eight or nine months. All that stuff.
Ressa 40:10
Okay. And so that’s even faster than I, I would have thought but pretty cool, I guess.
Inserra 40:17
Yeah. But that’s that’s the thing is that was being very engaged in the process. You know, we want to know what was going on. We brought the health department in early. So I think the more engaged you are, the faster you provide.
Ressa 40:29
What was supposed to be the roles of you and your partner you came up in? You say they were already gotten the place, he brought you up to do what he wanted you to be a partner? Why? That’s?
Inserra 40:40
That’s a great question.
That was that’s, you know, I think, I think what had happened, but we were both chefs, which is a problem, right? So everyone knows that adage. So you have two quarterbacks, you
have none, right? Yeah. Right. So and then I had a lot of
experience on the food and beverage management side back in the house. PNR p&l stuff, bookkeeping, accounting, payroll, marketing, branding, social media stuff.
And, you know,
I started taking that on as because I was just seeing invoices pile up, vendors wouldn’t deliver, those weren’t getting paid. And I’m like, Hey, don’t quit. We have anybody paying the bills here. He’s like, No. Yeah. So I started implementing, you know, who’s going to be our bookkeeper, who’s going to be our person who’s gonna help develop our brand, who’s going to do you know, our accounting identity, our taxes and stuff like that. So
initially, we were both in there. And I
did that for four years or so we worked side by side that chefs and it just got contentious. And then, once we started realizing that we would open another location, I then focus more on the operational stuff. So that’s when we have employment agreements drawn up and understanding who was doing what, on paper, but it’s still never matched. You know, he wants to do some operational stuff and was being put in his hands and that I was taking my hands in the culinary stuff. And it just, yeah, like your analogy to quarterbacks and we ended up we were just a little bit to want to make the
meet together. All right.
Ressa 42:09
Anything else the listeners should know about this story about Palpatine and Eastchester?
Inserra 42:15
You know, the story is, I wish them the best. I think I put my heart and soul into that brand for a really long time. And it’s a shame that it got real ugly at the end. But again, all those conversations that I had with you, and just talking to us bringing it all back up. But those conversations I had with lawyers and architects and building inspectors and city people.
You know, that
gave me the insight that I have today to kind of dig into my toolbox to use on a day to day basis. But you know, at the end of the day, you know, it was an unfortunate breakup, but you know, they’re doing well, I’m doing well. And it’s just life, you know, things don’t always work out as planned. And I think the lesson there is you need to be okay with that. Because on some level, it could be teaching you something that you’re ready for something else.
And I think that was the case with me. Awesome.
Ressa 43:09
Well appreciate the insights. And I’ve never been the pulpit, Tina. But now I want to go check it out.
Inserra 43:17
We gotta go to you enjoy the taqueria to enlarge ammonia that we can have lunch there one day.
Ressa 43:21
Awesome. We’ll do. All right. The last part of our show is called retail wisdom. I’m going to ask you three questions. And it’s our version of rapid fire. But it’s not fast. It’s just our end of the show questions.
Inserra 43:38
All right, let’s go I’m ready. I think
Ressa 43:41
one best piece of commercial real estate advice out there for everyone
Inserra 43:45
come from a standpoint of giving
and work and bringing your value upfront. Don’t I think people are often hesitant to offer
too much of their value or their time to a client based on who they are the size requirement or things of that nature. I say that because I’ve been that guy and I know what it feels like to get the partial treatment. And I know what it feels like to get the full treatment and the full treatment is always better. So I think providing your upfront value whether it’s in restaurants or in retail or in multifamily or investment,
I think you know, high
to social media is that platform I choose you know podcasting as that platform. But you know there are plenty other ways to do that. And I think providing that
value up front is major. All right, cool. sage advice. Question to
Ressa 44:43
extinct retailer you wish would come back from the dead blockbuster.
Why blockbuster?
Inserra 44:50
I just like the experience, I like going out whether they you go there and you scan and get a card and it’s now like a 500 square foot store and they give you the code to watch on your TV but There’s something nostalgic about that with me like going out picking up your Twizzlers and then bringing the movie home with you. Yeah, no, it seems just a little cold now but yeah, Blockbuster for sure.
Ressa 45:09
I love scanning through on demand, Netflix, Hulu, whatever to try to find the right movie I like actually have fun scanning through my wife’s like, would you just choose one, please just choose one.
Inserra 45:23
The same things like documentary sports things. And
she hates that though. So
if you go to Blockbuster, you get one of each and then you pick one day the next day.
There you go. You go. Third question.
Ressa 45:36
I am looking at the Cuttack water bottle on Kitack ease website, or cap tacky, and it’s got a it’s got the the time on it. It’s got an auto lid, it’s this awesome new water bottle. And what is the CAC tacky water bottle 32 ounce retail for you I have
Inserra 46:00
first of all, this is anything like the Hydroflask it’s probably astronomical. Um, it has one on it, a clock and a
Ressa 46:10
it’s got it’s got this time so that you can see when you drank the water. And so you know, when you’re drinking, it’s got this auto lid. It’s it’s pretty, pretty, pretty cool.
Inserra 46:23
32 ounces 32 ounces
one water bottle 6999
Ressa 46:28
You know, your way on their website 1995. So yeah, check it out. The CAC tacky water bottle looks amazing. I am not a consumer of it yet, but I’m gonna check it out. I just recently heard about it because is one of the hot water bottles out there right now.
Inserra 46:47
Your next podcasts gonna be sponsored by them because these girls are kind of like my 12 year old daughters. tangrams like 40 bucks
for a metal like nothing stuff. Well, listen, Kyle,
Ressa 47:00
it’s been awesome learning about you, it was really good to feel the struggle of a true restaurant tour and, and understanding how that happened. And I think you brought some raw realness to the show that people need. And, you know, I’m glad you’ve found a new passion and pivoted and taking those restaurant experiences into commercial real estate. I think you’re, you have a lot of value to bring. So we need to grab lunch sometime and you should come by our offices in Ellensburg. And best of luck, man.
Inserra 47:34
Thanks for having me, man. It was great. I appreciate it. And yeah, anytime you want to have lunch, I didn’t even realize you guys went I’m sure so yeah, let’s do it.
Ressa 47:44
Thank you for listening to retail retold. If you want to share a story about a retail real estate deal you were a part of on our show. Please reach out to us. This podcast highlights the stories behind deals from all perspectives. So it doesn’t matter if you’re a retailer, broker attorney or an architect contacts dying Diane Lee at D L E at DLC mgmt.com Also, don’t forget to subscribe to retail retold so you don’t miss out on next Thursday’s episode