Brooklyn waterfront’s commercial landlords forgo rent to keep Sandy-ravaged tenants

TRD New York /
May.May 16, 2013 06:00 PM

Seven months after Hurricane Sandy, many tenants along Brooklyn’s waterfront are still unable to pay rent or operate their businesses. But landlords in the borough – much more likely than their Manhattan counterparts to be small, local players – are finding creative ways to help tenants who are struggling to stay put, landlords told The Real Deal.

Red Hook landlord Gregory O’Connell Jr. said things in that neighborhood have been slow to recover. In fact, the O’Connell Organization itself only moved back into its headquarters last week, after 4.5 feet of water rushed into the firm’s Pier 41 offices during the Oct. 29 storm.

“We’ve been focused on getting everyone back in,” O’Connell said.

O’Connell said he has provided abatements for tenants that cannot operate and offered loans with 1 percent interest rates to tenants who need assistance to get back up and running. About 80 percent to 90 percent of his ground floor tenants lacked flood insurance, he estimated.

For tenants who could not operate for months after Sandy, he abated the rent and tacked those months back on to the end of the lease.

Up in Dumbo, ubiquitous local landlord Two Trees Management was “trying to work things out with [tenants] on the back end,” said the company’s director of leasing, Caroline Pardo, at Brooklyn Historical Society’s quarterly Real Estate Roundtable, held last week.

Two Trees is also talking to insurance companies on behalf of their tenants, most of whom were not insured against flooding, and helping tenants modify their spaces so that the next storm will not cripple them.

“We are trying to play a more active role now,” Pardo told the crowd.

In the Coney Island area, Joe Sitt’s Thor Equities discounted rents up to 40 percent, in an attempt to keep local businesses in His Properties Along Surf Avenue, a source said. Local businesses that have recently signed at reduced rents include Brooklyn Rock, a handmade t-shirt purveyor, and Wampum, a surf and skate shop, the source said.

“I think this is a great initiative,” said veteran retail broker Faith Hope Consolo.

Some Manhattan landlords considered similar measures, she said, though none have hammered out anything concrete. The flexibility of smaller Brooklyn landlords may be allowing them to give tenants a break, she said.

“Most of the owners are independents,” in Brooklyn, she said.

And things are improving, if slowly.

“We haven’t been experiencing as much loss,” O’Connell said.

Many tenants are receiving funds from the Small Business Administration, although for some tenants red tape is holding up any federal aid they might qualify for.

“Their paperwork was destroyed in many cases,” O’Connell said.

Related Articles

Mayor Bill de Blasio and subway damage caused by Hurricane Sandy (Credit: Getty Images)

Program to rebuild Sandy-damaged homes needs extra $92M

Army Corps of Engineers Commander Lt. Gen. Todd Semonite and flooding caused by Hurricane Sandy in 2012 (inset) (Credit: Getty Images)

A $119B seawall still might not protect Manhattan, critics say

494 Broadway and Thor Equities' Joe Sitt (Credit: Google Maps)

Thor faces foreclosure on site where lender says it’s seeking “unrealistic rents”

Thor Equities' Joe Sitt and 725 8th Avenue (Credit: Google Maps)

Thor facing foreclosure at Theater District building

Joe Sitt and 1725 Shore Parkway in Bensonhurst (Credit: Google Maps)

Thor sells Bensonhurst big-box store for $75M

Thor Equities chairman Joe Sitt and 1006 Madison Avenue

Thor in danger of losing Madison Ave property

545 Madison Avenue and Thor Equities' Joe Sitt

Thor Equities in hot water at 545 Madison

From left: Joseph Sitt, Yaron Jacobi and Uzi Ben Abraham; 117 East 15th Street, 1122 Madison Avenue and 96-33 Queens Boulevard (Credit: Google Maps, Getty Images)

Here’s what the $10M-$30M NYC investment sales market looked like last week