It's been more than a week since Hurricane Sandy swept through the East Coast and ravaged its coastline. The epic storm is being touted as the most costly to ever hit New York City and New Jersey.
Most of the news is about residents with flooded homes and massive power outages. But what impact did Sandy have on multifamily infrastructure in the New York metro area? While initial damage assessments are still being done and figures are hard to come by, some of the major REITs have addressed the costs for damages incurred from the storm.
One of the largest blows was dealt to Highlands Ranch, Colo.-based UDR, which has a large New York City portfolio. Some residents are still without power at its lower Manhattan properties of 10 Hanover Square, 95 Wall, and Rivergate. Each of these properties saw ground-level flooding and power outages. The company’s newly acquired Columbus Square and its 21 Chelsea properties sustained minor undisclosed damages as well. Before insurance proceeds, estimates put the damage at anywhere between $11 and $14 million.
"Damage to our Mid-Atlantic portfolio appears minimal at this time; New York City is more extensive and concentrated in our lower Manhattan properties. Currently, our teams are on the ground and working diligently to ensure the safety and comfort of our residents and to reinitiate normal operations as quickly as possible,” said Tom Toomey, president and CEO of UDR in a statement.
Another REIT impacted by Sandy was Rochester, N.Y.-based Home Properties. Initial estimates put repair costs in the $1 million to $1.5 million range. This translates to a net financial impact of about $300,000 or $0.005 per share after insurance reimbursements.
“Our New Jersey and Long Island regions were hit the hardest, as you can imagine," says Ed Pettinella, Home's CEO. "Most of the damage consists of damage to roofs, gutters, shingles, siding from the wind, property damage from fallen trees and limbs, water in basements from leaks.”
And Denver-based AIMCO reported an estimate of $1 million to $2 million in repair costs, much of which will be covered by insurance. Ernest Freedman, AIMCO’s CFO and executive vice president said the company was quite fortunate to have ended up as unharmed as they were and the storm was no more than a “significant inconvenience.”
There is good news for some of New York's displaced tenants: This inconvenience won’t be coming out of their wallets. Tenants at eight properties in New York City will receive rent credits this month from the Moinian Group after being displaced by Hurricane Sandy last week.
The rent credits will be provided for each day displaced tenants are not able to use their spaces. The efforts will help tenants in lower Manhattan, where most of the company’s assets are located. In total, the company owns about 20 million square feet of office, retail, and residential property across the nation.
The Moinian Group says it is too early to estimate the cost of damages sustained from the hurricane, but it is continuing to “work tirelessly to restore services to affected buildings.” Its team is working closely with the city, the Department of Buildings, Con Ed, and other service providers to restore all properties and services, although it is unknown when tenants can use the spaces again.
As more damage estimates roll in, the true impact of Hurricane Sandy will be revealed. But for now it appears that even though plenty of multifamily companies took it on the chin from Sandy, the rebuilding process is underway.
Stay tuned to this website for more Hurricane Sandy news as it become available.
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