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As the famed British nightclub Sankeys expands to Midtown following three years of hurdles, nightlife brokers and owners confront New York Citys changing and increasingly competitive club scene amid a global dance music boom and maybea more tolerant incoming administration.

The nightclub Sankeys NYC opened on Halloween night last week, a well-timed debut that took advantage of adult New Yorkers embrace of the childrens holiday as an excuse to drink lots of booze in little clothing.

But the timing did not go as planned. In fact, Sankeys, a dance club franchise that began 19 years ago in Manchester, England, had at one point been expected to open closer to New Years Eveof 2010. The Sankeys team announced plans for a New York offshoot in the summer of that year (a third operates seasonally in Ibiza, Spain). It would be located on West 50th Street near 12th Avenue. The delayed Halloween launch took over the clubs 14,800-square-foot home at 29 West 36th Street between Fifth Avenue and Avenue of the Americas.

Delusional completion and opening date estimates are par for the course in real estate. And Sankeys NYCs goal of an early 2011 opening was tentative at best. But the clubs protracted search for a Manhattan base is emblematic of the twisted, torturous road a nightlife venue often takes to a permanent home.

There are several reasons why club openings are relatively rare events. Nightlife is a famously fickle business, with young patrons moving on from one venue to another as soon as buzz shifts. New York has been vocally hostile to the industry for the 20 years since Mayor Rudy Giuliani launched his quality-of-life campaign. Drugs, underage drinking and occasional violence survived that purge, even if Limelight, Tunnel and Twilo didnt. But brokers are more concerned with the bricks, mortar and bureaucratic logistics of opening a club than the fleetingness and sometimes-seamy aspects of the undertaking.

Theres huge reluctance, Alex Baumol, who represented Sankeys NYC early in its hunt for a New York outpost, said of a typical brokers stance on getting involved with nightlife transactions.

Its more tormenting than typical retail real estate, said Alex Picken, whose nightlife brokerage Picken Real Estate has represented Pacha, Terminal 5 and Copacabana, among others.

Mr. Baumol helped Sankeys seal what appeared to be a done deal on the Far West Side. The fate of that address attests to his thoughts on the foggy, disorienting challenges of nightlife real estate. Its high risk and not the highest reward, he said. It can be quite lucrative. But at the same time, the deal flow isnt tremendous, and basically youre looking for those couple of big deals that come along every couple of years.

The real challenge involves both types of club deals, Mr. Baumol said. The first is getting a raw, new space that isnt licensed and requires build-out. That takes lots of money and time. And theres a risk that the deal will never consummate. You go forward pending community board approval. The landlord says you dont have anything until you get that, but the tenant wants to lock up the space. Both sides are right, but its a headache right off the bat. And no one is going to pay you commission until the CB approves.

On the other hand, inheriting an existing clubs lease often entails hefty fixture fees, or key money. Key money deals include the transfer of existing equipment, liquor and, in some cases, cabaret licenses. And with the exception of extremely high sales prices, commissions in these cases often suffer, since these transfers involve below-market rents.

More here:
The Agony and the Ecstasy of Opening a NYC Nightclub