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CRANES AND HARD HATS: Construction workers have lined Second Avenue from 7 a.m. to 10 p.m., Monday to Friday, for several years building a new subway line. (Tara MacIsaac/The Epoch Times)
NEW YORK—The extended subway construction on the Upper East Side along Second Avenue has put a cramp in business and a dent in realty prices. When the construction is finished, however, realtors expect the improved transportation infrastructure to raise property value substantially.
“The returns will be huge in the future, so the time to get in is now if you are well capitalized,” wrote Faith Hope Consolo, chairman of Prudential Douglas Elliman Real Estate in an e-mail. Whoever has the capital to weather the storm will reap the reward, but as chairman of Massey Knakal Realty Services Bob Knakal points out, “That doesn't really help people today, because they're trying to pay their rent every month.”
Phase one of construction began in 2007 and was set to finish in 2013, but has been pushed back until 2016. Phase one stretches from 105th Street and Second Avenue to 63rd Street and Third Avenue, and includes several new or improved stations. With all four phases, the line will reach from 125th Street to the Financial District in Lower Manhattan.
In the meantime, businesses are struggling to draw customers through the chain link fencing and noisy machinery. Dozens of businesses have shut down, but a few have actually moved in.
Consolo says in some cases retail rent has been cut in half: from $200 a square foot, down to $100 or $150 a square foot. She expects retail space to remain cheap for a couple of years.
“Right now, there's a lot of restaurant space available, and that market is always volatile, but some stores are coming in,” writes Consolo.
SLOW GOING: Subway construction on Second Avenue began in 2007 and is expected to continue into 2016. (Tara MacIsaac/The Epoch Times)
While retailers tend to be renters, residents tend to be owners. The homeowners are often in a better position to wait out the construction, says Consolo. Some local residents, however, couldn't take the noise and moved out, reports Charlie Portelli, a retiree and part-time superintendent of a building by Second Ave. and East 83rd Street.
“Who knows when they will actually be done [with construction]” said Portelli.
As the real estate flux moves further south with the construction, Knakal asks a similar question, “Who knows what happens as the project goes further south? Will there be sufficient funding?”
The cost of the entire new subway line is expected to be at least $16 billion by some estimates.
Consolo predicts, “The market uncertainty will just follow construction south—at least until the earliest areas have bounced back. Then people will see that they must invest early, and it should be less of a problem. But it will take time.”
She looks back to the building of Lincoln Center in the 1960s. It was a bad situation for Columbus Avenue businesses, but “now, it's some of the most valuable retail real estate in the city.” She thinks the established affluent residential area will help the Upper East Side region bounce back quickly.
