The Real Deal New York

Lions and tigers and recessions, oh Brooklyn!

Borough's RE market may be able to weather L Train shutdown and rental glut, but not the economy: panel

September 08, 2016 07:00AM
By Rich Bockmann

From left: Jonathan Rose, Toby Moskovitz, Paul Travis and David Maundrell

From left: Jonathan Rose, Toby Moskovitz, Paul Travis and David Maundrell

Real estate players with their eye on Brooklyn’s residential market can fret over a possible rental glut hitting Downtown Brooklyn, or an L Train shutdown stinging landlords along the subway line.

But few things are as unpredictable – or out of one’s control – as the economy.

“What keeps me up at night is another recession,” Jonathan Rose, president of Jonathan Rose Companies, said Wednesday during a panel discussion in Downtown Brooklyn on the state of the borough’s residential market.

Whenever the next recession hits, Rose continued, it will have a systemic impact on the entire market.

“No matter how great your location is, everyone gets affected by it,” Rose said.

As the economic cycle expands toward its historic limits, developers are following different paths as they try to time the market.

The economy has never seen an expansion that’s lasted longer than 10 years, and with the current one already seven years old, many feel it’s just a matter of time until the economy hits the pause button.

Industry experts touched on a range of hot-button issues during the Brooklyn Real Estate Summit hosted by Freedom Mortgage at the New York Marriott Brooklyn Bridge Hotel.

During a discussion on the borough’s commercial market, Heritage Equity Partners CEO Toby Moskovits said the 18-month shutdown of the L Train beginning in 2019 could force Brooklynites to become more borough-centric.

“In some ways, if you look back 10 years from now, this might encourage more people living in Brooklyn to do more of their activities [there],” she said.

And with news that 7,500 new units of housing are expected to become available over the next two years along a 10-block area in Downtown Brooklyn and Fort Greene, many are concerned the neighborhoods may be headed for a housing glut.

Paul Travis of Washington Square Partners said he thinks the L Train shutdown could help absorb many of those units.

“We are definitely seeing some shift where people who would’ve been in the rental market in the newer buildings in Williamsburg are now looking in Downtown Brooklyn because they’re concerned about the subway,” he said.

Travis’s company is co-developing City Point, the Downtown Brooklyn megadevelopment that’s adding several hundred of those new units, which may have made his comments suspect to some of his colleagues.

“I’m a firm believer that the developers in Downtown Brooklyn are the ones that pushed the MTA to close the L Train,” Citi Habitats’ David Maundrell quipped lightheartedly earlier in the day.