Philip Chong is a principal at HCRE, a real-estate development and investment firm with a handful of buildings in and around New York City. He also owns and founded Canal Street Market, a food hall, retail space, and event venue in Manhattan’s Chinatown.
I’m a second-generation real-estate developer, and our family has always focused in and around the Chinatowns. Historically, we were in Manhattan’s Chinatown, and more recently, we started putting more attention into Queens. My father was an immigrant from Hong Kong, and his initial business was importing watches; then sometime in the early ’90s he started investing some of the money from importing watches into real estate in Chinatown. We own a portfolio of residential, office, and retail properties, so we run the full gamut. I also own and operate Canal Street Market. That’s in 265 Canal Street.
2019 was a pretty standout year for us — for our properties and for Canal Street Market especially. It felt like business was really starting to hum. We were doing a lot of community panels, events, and we even had a podcasting studio in the back, where we let local creators speak. So that was the background going into early 2020. A lot of us in Chinatown had family members living in China, so we started to get wind of the situation in China from them. I remember one of my friends texting me on WeChat, telling me that I should really start worrying and order disinfectant and hand sanitizer for the market.
I think it was sometime in February when I started getting reports from my restaurant and retail tenants in both Flushing and Manhattan that sales were dropping off quite dramatically. I have personal relationships with all my tenants; I feel like we’re partners in this. The concerns were starting to trickle in, but there was really no clarity on how severe it would become. It was this general feeling of “Ooh, this is a serious problem, but eventually it was going to pass.”
It slowly evolved over time into me having literally hundreds of conversations with all my tenants, listening to their individual situations and hardships and starting to work out rent concessions that would help tide us over in the short term. That eventually evolved into even harder conversations and really deep concessions and sometimes even completely free rents for some of my tenants. Some of my tenants weren’t able to survive, and that’s really heartbreaking. As a landlord, part of what I try to do is really listen and try to work with their situation.
Two stories stand out for me. One: There were two very accomplished pastry chefs that opened a small bakery inside Canal Market, Domi, in early 2020, right before COVID-19 hit. Extremely young but super-motivated and very hardworking. They opened it up with pretty solid success; they were able to get a little press and a small following, and suddenly COVID hit and we had to temporarily shut down. I was still checking in with them on a weekly basis. We allowed them and all our tenants to use the space for free so they could try to do some delivery. They were baking pastries and breads and delivering it themselves with a car they borrowed. I think the community was really supportive; they were also buying gift cards. Even with our deal with them being rent free, they weren’t able to sustain themselves, and that is super-heartbreaking because you see two young kids risking it all to start a business and they just got hit with the most unfortunate timing. They went above and beyond — I saw them doing the deliveries, working late hours every single day in that space, and they just weren’t able to make it work. That’s just one of hundreds of stories that aren’t being told right now.
The other story is we own a building on Pell Street where one of our tenants is a hair salon. They were in a similar situation in March and April. They were paying us rent, then sometime in May the owner’s daughter reached out to me and explained the hardships her father was facing. I think in Chinese culture, people are extremely proud of their work, and she was explaining to me that, for her father, the most important thing was his word and his standing in the community. If rent’s due, he’s going to pay it. Then she started telling me he was starting to dip into his life’s savings, and that’s when she became worried. He had never reached out to me before. I think he wanted to do what was right and honor our agreement, but at the same time was having a really rough time. So the daughter and I talked and worked out a rent-concession deal where he could keep all the hairdressers employed through the period where nonessential businesses were shut down.
For the months that Canal Street Market was shut down, we charged zero in rent. We reopened in the summer and changed to a rent based on percentage of sales, but that wasn’t sustainable for the market or the vendors, so we had to close back down after December. We reopened recently. It’s located on Canal Street, so a lot of the clients were tourists, but the vast majority were the office workers in Soho, Tribeca, and even the courthouses downtown. Without people coming back into the office, our business is not sustainable.
It’s been easily the toughest year professionally for me, and I started working in 2008 so my first introduction into real estate was a financial crisis. I distinctly remember that time period, and this is really hard. On one hand, you want to do the right thing, but there are limited concessions for landlords. Our biggest expenses are going to be property tax and our mortgage. There’s no deferral on our property-tax bills, and there are limited options when it comes to mortgage payments. At the absolute worst of it, we were making 50 percent of our rent collections, maybe even lower. We’ve weathered the worst of it, and we’ve started to see the end of the tunnel. We have seen some recovery in apartments. There was a flood of people coming back to NYC sometime after January, but commercial real estate has been slower in recovery.
We’ve had an incredibly hard time in Chinatown specifically but really for everyone. And it’s been compounded by the fact that we’ve seen this uptick in anti-Asian sentiment, and that’s really tough and those issues have to be addressed. It’s a little tough to talk about anti-Asian racism because, chances are, if you ask any Asian American in New York City if they’ve been on the receiving end of harassment or violence, the answer is most likely yes. During my time in New York — I was born and grew up here — I’ve been called a “chink,” “Chinese fuck,” “coronavirus.” I remember being threatened with violence over the summer, completely unprovoked while standing at a stoplight in Chinatown. This exists and has existed for quite a while. Ultimately, I’m very proud of this city, and I’m optimistic because Asian Americans are certainly getting a lot louder and they’re proud and they’re willing to fight back. While there’s a lot of healing to do, I think what’s encouraging is it’s starting to happen now.
It’s been heartbreaking to see some of our most beloved establishments close down — institutions within Chinatown that people like me grew up loving. But I think ultimately I’ve never felt more energized and inspired by the work within our community. You’ve seen it in the last year: A number of organizations started by young professionals pop up, we have a very active Chinatown BID, and members of the media are highlighting our stories.
I’m part of a Chinatown-based community health center, the Charles B. Wang Community Health Center, which is actively testing and vaccinating members of our community. They’re approaching 15,000 doses delivered. That’s distributed to members of our community who are often elderly and vulnerable, and sometimes they don’t speak English. They’re eligible for the vaccine, but they’re at a disadvantage within our system or they have limited resources and can’t often get the vaccine through traditional means. These are people that go out and buy our groceries, go to our restaurants; they’re getting their hair cut on Pell Street. And they’re the backbone of our economy. So I think the point is I’m seeing all these people working together for the benefit of this small community, and it’s really starting to work. I’m seeing it in real time.
I feel like landlords, they get grouped up into one silo — there’s this thought that all of them are deep pocketed and have a big portfolio of properties and are able to weather the storm, but the truth is it’s a lot more nuanced than that, especially in Chinatown. I think that most of the landlords or property owners within Chinatown have a lot of pride in working with all of their tenants and being as much of the fabric of this community. These buildings are not cheap to operate, but ultimately I’m hopeful that Chinatown will bounce back quickly and New York City will bounce back quickly.
In order for us to make this work, New York City as a whole has got to work together. Chinatown is important to the fabric of the city; the fact is we’re a part of many other communities within the city, right? So landlords, local stakeholders, government, everyone — we have to come together, we have to partner up, and we have to listen to each other. And I think that’s starting to happen.
In the meantime, we have to be highlighting these small businesses that are really having a tough time. You take these Asian-owned small businesses, even in Canal Street Market, like Joe’s Steam Rice Roll, Lazy Sundaes, Kabuki, A-Frame — these are young entrepreneurs that are going out there, they’re taking a huge amount of risk, and they’re choosing to do it in Chinatown. That’s the stuff we want to support.