Where Harry Met Sally

Katz’s Delicatessen, a Lower East Side institution for more than a century, has dodged the fate of many small businesses in today’s frenzied real estate market. Unlike neighboring businesses Ray’s Pizza, Empanada Mama and Bereket, Katz’s will continue to serve up its staggering pastrami sandwiches – at least for a while – thanks to the sale of two neighboring properties and air rights for $17 million to a condo developer.

Magnum Real Estate Group and Real Estate Equities Corp. have paid a total of $75 million for 12 single-story buildings on the same East Houston Street block as Katz’s, where they’ll erect an 11-story, 94-unit condo building, the New York Times reports. Studios will cost around $1 million, while 4-bedroom apartments will start at about $5 million.

As for the mom-and-pop businesses that were shuttered to make way for the new condo, Magnum Real Estate Group founder Ben Shaoul says, “I’m sorry they went out of business, but it’s part of evolution. You call it gentrification, I call it ‘cleaning it up.’”

Richard Moses, president of the Lower East Side Preservation Initiative, sees things a bit differently. “When you lose too many [mom-and-pops], what you end up with is an environment that doesn’t feel urban, doesn’t feel local,” he says. “It feels more generic.”