The Real Deal New York

The battle between small-batch and big box

By Stuart Elliott | September 01, 2012 07:00AM

Forget flea markets that sell “Made in Brooklyn” organic jams and small-batch beer crafted in a bespoke, locally sourced manner by twentysomething men with long beards and women with tattoo sleeves.

Instead, Williamsburg — the original home of the hipster — looks to be getting a J.Crew. And a Whole Foods is already on the way.

In another hip neighborhood, the Meatpacking District, the boutiques of fashion-forward designers like Diane von Furstenberg and the late Alexander McQueen (whose shows have featured runway models in gas masks) are being joined by the likes of mainstream clothing retailers Patagonia and UGG Australia. Ugh, some would say.

In this issue, we take an in-depth look at how mass-market retailers are making inroads and upsetting the apple (well, actually, the shopping) cart in the two artsy neighborhoods, in stories Shopping Willaimsburg and Mass market for Meatpacking.

Retail, arguably more than other kinds of real estate, can be a lightning rod for debates about gentrification.

Of course, the desire of these big retailers to open these outposts can be traced back to money. An influx of families as well as European tourists in Williamsburg is luring in the new national chains there. And in the Meatpacking District, it’s the throngs of visitors to the High Line and their spending power attracting the attention of more mass-market retailers.

And landlords are reaping the benefits.

On Bedford Avenue, asking rents have nearly doubled from a year and a half ago, according to brokers. In the Meatpacking District, meanwhile, in some cases rents are 10 to 20 times higher than they were in the late 1990s, and some brokers predict rents will double again in the next two to four years (though others are less bullish).

But transitioning neighborhoods can make for strange bedfellows.

In Williamsburg, a pricey 245-room boutique hotel on North 4th Street is replacing retailers, including a hookah bar and a Laundromat, in a typical sign of gentrification. But stores like Duane Reade — which in 2010 opened a growler bar with local beers on tap at its Bedford Avenue location — may provide a roadmap for other national chains looking to win over an otherwise reluctant clientele. (I don’t know about you, but I don’t like the idea of drinking at the same place where I would buy deodorant.)

And who knows? Maybe this more mainstream flare will rub off on hipsters (hopefully this includes the woman who stood in front of me in line at Stumptown Coffee recently, who had a 15-minute conversation with the barista about where the beans in her coffee were lovingly grown).

Maybe once these stores arrive, hipsters will start wearing clothing from J. Crew or the Gap with a sense of irony.

To some degree, the tension between the mass market and the artisanal is a false canard. If people are selling $10 bags of granola or $14 pickles or $9 bottles of jam, there must be enough wealth to pay those prices.

These handcrafted products are a sign of prosperity, not antithetical to it. The wealthy residents in the city are supporting this whole new borough of tinkerers, artists, graphic designers, small-batch entrepreneurs and chefs.

But there seems to be a growing cultural gap between big cities and the rest of the country, which is partly being reflected in the presidential race. (I think its reasonable to assume that most rural tea partiers don’t care if their granola is organic). The divide is also economic. Given the general economic uncertainty nationally, big cities like New York have done well — and so has their real estate.

And you can see that in the pages of this issue. We have a story about the new real estate records poised to be broken in the city and a piece on the optimistic outlook for the fall residential market (markedly different from this time last year).

We’ve also got a story on the best residential brokerages to work for and a profile on Rob Speyer, the new head of the Real Estate Board of New York, the youngest person ever to lead the powerful trade organization.

Enjoy the (locally sourced) issue.