NEW YORK--(BUSINESS WIRE)--In 2012, Hurricane Sandy flooded Brooklyn's L train infrastructure with
seven million gallons of saltwater, leaving behind significant damage.
The train tunnel will be closing for repairs, and nearly three out of
four (71%) commercial real estate executives expect Brooklyn property
values to decline during this restoration process, according to Marks
Paneth's most recent Gotham
Commercial Real Estate Monitor.
What's worse, since a timeline has yet to be established for the repair
work, nobody knows how negative - or prudential real estate how long - the impact of the
closure will be. The Metropolitan Transit Authority (MTA) does not
expect to award a contract for the project before the end of 2016. It is
still unclear how the L train will operate during the restoration.
The L train is a critical component of cross-town transportation,
running ten miles from west Manhattan to southeastern Brooklyn.
According to the MTA, nearly a quarter of a million people ride the L
train between these two points every weekday.
Opinions among CRE executives are divided as to whether Brooklynites
will move due to the closure. Although 47 percent do not believe that
residents will move, 38 percent think they will.
Who is right? It depends, in part, on where commuters live and whether
they own or rent.
The L train closure is especially likely to affect the Williamsburg and
Bushwick neighborhoods in Brooklyn. The majority of people who live in
these neighborhoods are renters, not owners. Renters are more likely to
move, which may push prices down.
William Jennings, partner-in-charge of Marks Paneth's Real Estate Group,
believes there may be a silver lining: "In neighborhoods like
Bedford-Stuyvesant or Greenpoint, which have access to other modes of
transit, prices may actually rise as renters migrate to neighborhoods
unaffected by the closure."
A quarter of executives surveyed agreed that prices in neighborhoods
unaffected by the L train closure could very well increase.
Mr. Jennings also pointed out that any downturn resulting from the L
train closure may create buying opportunities: "It will be interesting
to see where the smart money invests. I wouldn't be surprised commercial real estate property if demand
for office space increases in Brooklyn, as companies attempt to
accommodate residents affected by the closure."
The survey was completed by 145 professionals working in New York City
commercial real estate, including legal counsel, bankers and lenders,
brokers and agents, developers, property managers and owners. The
results reported here are based on completed self-administered surveys,
fielded in late February and early March, 2016.
For more information, please contact John McKenna of ICR, Inc. at (203)
682-8252 or email@example.com.
The full survey results can be found here.
About Marks Paneth
Marks Paneth LLP is an accounting firm with more than 600 people,
including over 80 partners and principals. The firm provides public and
private businesses with a full range of auditing, accounting, tax,
consulting, trade remediation and valuation services as well as
litigation and financial advisory services to domestic and international
clients. The firm also specializes in providing tax advisory and
consulting for high-net-worth individuals and their families, as well as
a wide range of services for international, real estate, hospitality,
media, entertainment, nonprofit and government services clients. The
firm has a strong track record supporting emerging growth companies,
entrepreneurs, business owners and investors as they navigate the
business life cycle. The firm's subsidiary, Tailored Technologies, LLC,
provides information technology consulting services.
In addition, Marks Paneth's membership in Morison KSi Ltd., a leading
international association for independent business advisers, financial
consulting and accounting firms, facilitates service delivery to clients
throughout the United States and around the world. Marks Paneth, whose
origins date back to 1907, is the 34th largest accounting firm in the
nation and the 8th largest in the mid-Atlantic region. In addition,
readers of the New York Law Journal rank Marks Paneth as one of the
area's top three forensic accounting firms for the sixth year in a row.
Marks Paneth is headquartered in New York City, with additional offices
in Washington, DC, New Jersey, Long Island and Westchester. For more
information, please visit markspaneth.com.