The Real Deal New York

Surveying the destruction

Mapping out the New York area’s real estate and property damage left in Sandy’s wake

December 01, 2012
By Guelda Voien

In the weeks since Superstorm Sandy, the media has vigorously documented the devastation wrought by the hurricane and its accompanying storm surge.

That destruction — which includes the outer-borough communities where families are still not back in their homes and Lower Manhattan buildings that are still empty because their mechanical systems were ruined — will cost billions to fix.

This month, The Real Deal looked at some of the hardest-hit areas of the New York region to find out how much property was lost and what will go into rebuilding.

Red Hook

Roughly 300,000-square-feet of property — including at least 50 businesses — in this industrial-waterfront-area-turned-hipster-hub was damaged in the storm, according to Greg O’Connell, one of the area’s largest landlords. According to community housing group the Red Hook Initiative, damage to the neighborhood could total $50 million. The popular grocery store Fairway, in a building owned by O’Connell on the water, was among the hardest hit. The 52,000-square-foot store, which is still closed, took in five or six feet of water. Joe Sitt, who owns a 660,000-square-foot parcel next to furniture giant IKEA, also  incurred property damage. O’Connell said he is offering concessions to tenants in some of his commercial buildings, including free rent and help rebuilding, on a “case-by-case basis.”

Hoboken, New Jersey

In the days after the storm, Hoboken Mayor Dawn Zimmer equated the city to a bathtub filled with water. Indeed, over 1,000 commercial and residential properties were impacted by the storm, according to a spokesperson for Zimmer’s office, adding that those building stats are preliminary and the final count “could be 5,000.” One Hoboken city official estimated that Hoboken saw at least $1 billion in damage, at least 80 percent of which was incurred at residential buildings. And of the approximately 140 residential Hoboken properties listed for sale before the storm, an estimated 56 percent were flooded or damaged, according to news reports. Applied Development Company, Ironstate Development and Toll Brothers were among the Hoboken landlords whose buildings were damaged.

Fire Island

As many as 100,000 homes and businesses on Long Island were destroyed or badly damaged in the storm, according to the New York Times.

Two of the region’s barrier islands took the biggest hit.

On Fire Island, the summer vacation mainstay, 80 percent of homes were reportedly damaged, and about 12 had been completely demolished or were washed out to sea. Fire Island “has been devastated,” Suffolk County executive Steve Bellone told Newsday.

Meanwhile, Long Beach, the barrier island off Long Island’s south coast that was severely damaged and saw a number of homes completely destroyed, was being referred to in the past tense on Twitter.

The Hamptons

A number of homes — including the residence of cosmetics baron Ronald Lauder in Wainscott — were damaged by Sandy. But the East End’s famed beaches and dunes took the brunt of the storm. The cost of repairing those dunes is “hundreds of thousands of dollars,” according to luxury developer Jeffrey Colle. On the commercial side, the Beach Barge restaurant at the Gurney’s Inn in Montauk was entirely destroyed, according to published reports. The oceanfront eatery had just been renovated, following damage from Hurricane Irene. Restaurants Gosman’s Clam Bar, Salivar’s and Duryea’s Lobster Deck also sustained considerable damage, according to the East Hampton Star, as did the Montauk Marine Basin, a yacht club. As for the impact that Sandy could have on the market, Douglas Elliman powerbroker Dolly Lenz told the New York Times that a client backed out of a $1 million year-round Hamptons rental after the storm, deciding to opt for something more affordable farther inland.

Rockaways

One of the most tragic results of the storm was the widely reported fire that ripped through the Breezy Point section of the Rockaway peninsula and burned down roughly 110 homes. In addition, in other parts of the Rockaways, such as Belle Harbor and Rockaway Park, nearly every home was impacted, said Lisa Jackson of local brokerage Rockaway Properties. The federal and city governments are expected to contribute financially, but much of the rebuilding could be left up to individual owners. Jackson predicted that some reduced-cost homes may come on the market. “There are some older people who will probably [sell and] take a significant loss just to move on,” Jackson said. Homes that are reconstructed, meanwhile, may be built on pilings as a precaution against future storms.

Lower Manhattan

Of the 183 Class A and Class B office buildings in Lower Manhattan, 49 were closed for at least a week following the storm, and 25 remained closed as of Nov. 21, according to brokerage Jones Lang LaSalle. The area also saw damage to some of its residential buildings, including 2 Gold Street and 88 Greenwich Street —which may not be inhabitable for months. While exact dollar estimates for the destruction in the area do not exist yet, it could be an entire year before the repairs at Boston Properties’ 4 New York Plaza are complete, according to news reports. Landlords Brookfield Properties, Rudin Management, Time Equities and TF Cornerstone also suffered damage at their buildings. “The Water Street buildings took the worst of it,” one source said.

Staten Island

Staten Island was the site of 22 storm-related deaths and thousands were rendered homeless by Sandy, at least temporarily. According to published reports, about 14,000 homes were destroyed or damaged. A preliminary inspection by the city about a week after the storm found that 87 homes were completely uninhabitable and at least 227 were badly damaged but livable. Those numbers are expected to rise. As of mid-November, 16,714 Island residents had applied for FEMA aid, and more than $53 million in aid had been dispensed, according to an agency spokesperson.

Jersey Shore

Upended boardwalks and destroyed amusement parks on the Jersey Shore provided some of the most dramatic images of Hurricane Sandy. But sources say the vast majority of damage in the area was residential, especially in hard-hit towns like Seabright, Mantoloking, Lake Como, Seaside Heights and Belmar. According to news reports, the damage exceeded $1 billion. As of late last month, FEMA had dispensed $235 million in assistance to New Jersey residents.

Still, the rebuilding efforts will be complex, as each municipality decides whether to rebuild in areas close to the ocean. “A lot of people won’t rebuild,” said Eric Anton, an executive at Brookfield Financial whose summer home in Interlaken was spared by the storm.” There are a lot of people with no insurance and … the question becomes, ‘Do we rebuild in an area where this can happen again?’ ”

Meanwhile, Long Beach Island, a narrow barrier island off the shore’s coast, sustained some of the worst damage — at least $700 million worth, according to published estimates. In the Ship Bottom neighborhood, more than 80 percent of homes were still underwater days after the storm.

And in Atlantic City, about 800 homes were destroyed, with damage upwards of $7 million, according to an estimate by Tom Foley, the Emergency Management Coordinator for the city. “Approximately everybody” in the city was impacted, he said.

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