North Brooklyn has seen a renaissance in real estate in the past few years, and the waterfront neighborhood of Williamsburg has been its crown jewel.
In 2015, four out of the top five biggest property sales in Brooklyn were for sites in Williamsburg, and one retail building on Bedford Avenue sold for $3,200 p/s/f.
Whole Foods is scheduled to open on Bedford Avenue in late spring, which is across the street from where an Apple store is rumored to be opening, though the company has never confirmed it.
But some are worried the Williamsburg/Greenpoint real estate gravy train may be coming to a screeching halt, with the MTA’s sudden announcement that the agency may have to shut down the L train between Manhattan and Brooklyn for more than a year, to repair the damage done by Hurricane Sandy in 2012.
The MTA admitted that the tunnel is need of repairs after being filled with saltwater during Superstorm Sandy, and it would need to be closed for more than a year. The agency is weighing its options, considering just shutting down the train on weekends, or shutting it down completely for a little over a year, like it did with the Montague tunnel in 2013.
According to the MTA, 225,000 weekday riders travel between Brooklyn and Manhattan on the L train. The line’s total daily ridership is 300,000. And unlike other neighborhoods in the borough, for many, the L is the only train serving the area — with other lines miles away.
Residents, business owners, brokers, and elected officials met at Brooklyn Bowl on N.12th Street in Williamsburg at a town hall meeting last week organized by a local coalition.
The MTA spokesperson present at the meeting, Adam Lisberg, didn’t have many answers for audience members.
John Horowitz, vice president and regional manager of Marcus & Millichap’s Brooklyn office, thinks the looming repairs will have an effect on rents, both on the residential and commercial side, mostly in the prime areas closest to subway stations, but is optimistic.
“The only reason I’m not as pessimistic as others, is that so many more companies are moving to Brooklyn from Manhattan, so it will be easier to work and live in Brooklyn simultaneously,” said Horowitz. “So for them, it won’t have as much effect.”
Horowitz’s firm does a lot of business in Williamsburg, Greenpoint and Bushwick, where he said prices have increased exponentially in the past few years. Though buyers are talking a lot about the shutdown news, “it hasn’t permeated to owners yet,” he said.
He thinks rents will have to adjust slightly downward, as well as prices.
“I want to see which plan they go with,” he said. “If I had a retail vacancy right now, I’d do whatever I could to get a tenant in there and give concessions.”
Peter Levitan, a retail leasing broker and managing director at Lee & Associates, has around 30 listings in Williamsburg.
“I would find it hard to believe that the MTA would shut down the train indefinitely for any extended period of time,” said Levitan. “I would hope they would do it gradually and focus the construction and limit service during times that experience the least amount of traffic.”
He feels that a shutdown of the L train at Bedford Avenue, the fastest-growing train station in the entire subway system, wouldn’t necessarily rattle retail in the area.
“I think there’s potential for retail rents to stay the same or increase, especially with the new development coming in,” he said. “Whenever there is a shutdown, there’s many alternative options –water taxis, CitiBike, shuttle buses. ”
Levitan hasn’t had any of his deals directly affected by the news, but he said the topic has come up often. He pointed out that most of the significant retail deals in the area, like Whole Foods, Apple, and Trader Joe’s, haven’t begun operating yet, and he anticipates a big jump in foot traffic once they do.
He added, “There’s a population that if nothing is decided, might just decide the worst.It’s interesting because the vagueness of the situation can actually be far more damaging than the actual construction itself.”