Restaurants across the country are being impacted, but perhaps nowhere more so than in Manhattan

THERE it was again. “Great space — perfect for you!” Stephen Starr’s BlackBerry was buzzing with a message promoting another tantalizing opportunity. “Brokers in New York and Philly have come to know me as the space junkie,” said Mr. Starr, who is the founder of the Starr Restaurant Organization, which owns 19 restaurants in Philadelphia, New York and Atlantic City. “I get e-mails every day.”

Mr. Starr’s investments have often started with an inspiring space. That’s how he came to have two major restaurants in Manhattan, a little more than a block apart.

In the spring of 2004, he had just closed the deal for Morimoto, a New York version of his Philadelphia restaurant named for Masaharu Morimoto, the Japanese chef at its helm, when the landlord suggested that he look at another space nearby.

Mr. Starr didn’t want to open another restaurant so soon, but when he saw the space — a soaring 16,000-square-foot former Nabisco factory on Ninth Avenue, at 16th Street in the Chelsea neighborhood — he was hooked. Two years and about $15 million later, it would house Buddakan, a New York outpost of Mr. Starr’s Asian-fusion restaurant, also in Philadelphia.

“There are great deals out there; the problem is, banks won’t lend you any money,” Mr. Starr said, referring to the continuing credit crisis. “It’s torturous.”

A lot of restaurateurs and the brokers that cater to them feel the same way. With the economy in a tailspin, restaurants across the country are feeling the pinch, but perhaps nowhere more so than in Manhattan, where the cost of opening and operating a restaurant has soared over the last several years. (Some restaurant neighborhoods that barely existed only a decade ago, such as the meatpacking district, now command rents of $300 to $400 a square foot, according to Jeffrey D. Roseman, an executive vice president of Newmark Knight Frank Retail.)

Even over the holiday season — typically the busiest and most profitable time of year for restaurants — business remained weak, as Wall Street firms and other companies canceled or curtailed holiday parties. High-profile restaurants across the city reported that holiday business was off 20 to 40 percent from the previous year, according to the New York City chapter of the New York State Restaurant Association.

“The collapse of Wall Street in October was the worst possible time for the restaurant industry,” said Chris Cannon, the owner of Alto and Convivio, both in Midtown Manhattan.

Sales at the high-end Alto declined over the last three months from the previous year, Mr. Cannon said, but business at his other restaurant is booming after it reopened last summer with a new name (Convivio, changed from L’Impero) a lower-priced menu and glowing reviews. Averaging the two, he said, he’s even with last year’s performance.

Mr. Starr, meanwhile, said business at his Manhattan restaurants was solid until December, when sales fell 5 to 9 percent. Now, he said, “We’re all concerned about this quarter.”

Industry watchers are anticipating a shakeout. Mr. Cannon, for one, predicts that 10 to 15 percent of New York’s high-profile restaurants will close in the coming months. “It’s tough,” he said. “Everybody’s talking to their landlord.”

Last month, Stephen Hanson, the president and founder of the restaurant group B. R. Guest Restaurants, closed Fiamma, an Italian restaurant in SoHo, and Ruby Foo’s, an Asian-themed restaurant on the Upper West Side. The leases for both were scheduled to expire this spring. Fiamma will become a space for private parties and events.

Steven M. Kamali, the principal of Steven Kamali Hospitality, a brokerage and consulting firm, says his restaurant listings — many of them struggling restaurants that still have time left on their leases, a situation he once described as signaling “imminent death” — have surged by 70 percent over the last 90 days. His current roster of 50 or so listings include restaurants in New York City and a few on the East End of Long Island. Mostly, he says, it’s smaller businesses with single, standalone restaurants that are in trouble.

Real estate brokers are bracing for a flood of restaurant properties to come on the market. The fabled Rainbow Room could be next. The landlord, Tishman Speyer Properties, and the Cipriani family, which has operated the Rainbow Room at 30 Rockefeller Center for the last decade, are enmeshed in a messy public battle over rent. At the current rent — $6 million a year — potential bidders will have to have deep pockets.

The food-friendly Chelsea Market, at 15th Street between Ninth and 10th Avenues, has two potential restaurant spaces available, brokers say. And a cavernous space at the MetLife North Building on Park Avenue, in the same building as the highly successful Eleven Madison Park and Tabla, both part of the Union Square Hospitality Group, has been on the market for nearly a year. The space was once occupied by Credit Suisse.

Mr. Roseman of Newmark Knight Frank Retail has the listing on a space on 58th Street and Madison Avenue, a prime location near the Four Seasons hotel and the General Motors Building. “We’ve had a lot of interest,” he said, but costs of building out the space have scared away some potential bidders.

Mr. Kamali said that his inventory of available space is sitting on the market twice as long as it would have just a couple of years ago.

Macklowe Properties has been looking to lease 11,000 square feet of prime restaurant space spread over three levels of its new 30-story tower at 510 Madison Avenue, at 53rd Street, which is expected to be completed this spring. The ground-floor space has 25-foot ceilings, and would probably fetch $300 or more a square foot, brokers say. A Macklowe spokesman said it is in advanced negotiations with a “veteran operator” for the entire 11,000 square feet. But the unnamed operator has not yet gone before the local community board for a liquor license, which would suggest a deal is far from done.

Still, the downturn offers opportunity for chefs or restaurateurs with access to cash and a good concept. After a breathtaking run-up in rents over the last several years — which gave rise to the $30 and then $40 entree as restaurants tried to cover their costs — many landlords are lowering their asking rents.

More favorable lease rates and a large pool of talent available for hire add up to “great opportunities to expand right now,” said Danny Meyer, the C.E.O. of the Union Square Hospitality Group. High rents are one reason his company hasn’t signed a lease for a fine-dining restaurant in five years, he said.

Mr. Roseman noted that many well-known chefs still did not have a presence in New York. “You can have the best restaurant in Cincinnati, but you’re not that big until you’re in New York City,” he said. Some starry-eyed chefs and restaurateurs are sniffing around, he said, adding, “There’s action.”

There are high-profile openings slated for this year. Shaun Hergatt, the Australian-born chef, is preparing to open SHO Shaun Hergatt, serving “modern French,” in the Setai, New York, a new luxury condominium development at 40 Broad Street, in late February. “I’m looking at this as a long-term plan,” Mr. Hergatt said.

And Mr. Cannon plans to open Marea, an Italian seafood restaurant, at the end of April in the former San Domenico space at 240 Central Park South.

Tony May, owner of San Domenico, who vacated his former site after he said the landlord wanted to increase his rent fourfold, is readying a new, larger location on 26th Street near Madison Park. By the time his new San Domenico opens this fall, he says, he hopes the economy will be on the upswing. “If not, I guess I’ll have to talk to my landlord,” he said, perhaps only half-joking.