1. The
Effect
Ari S. Heckman
Cayuga Capital Management

2. Housing
for
Hipsters
Obama’s victory celebration,
Bedford Avenue, Williamsburg,
2008

3. Key Themes
• The L-train as a transit corridor spine
• Neighborhood identification and evolution
around subway lines
• The evolution of pricing and gentrification
• How to appeal to a specific target
demographic
• A brief critique of who wins and who loses

4. Place
• Northwest Brooklyn, across the East River from
Manhattan
• Medium density attached housing with retail
corridors and activated corners
• Late 19th/early 20th century housing stock
• Decommissioned industrial buildings
• Located along the L-train (MTA)
• Bisected by the Brooklyn Queens Expressway (BQE)

6. Map
L
L
L L
L
L L

7. History
• 1820-1900: German/Polish Jewish immigrants
• 1870-1940: Manufacturing and commercial activity post bridge construction
– Williamsburg as manufacturing center
• Pfizer, Havemeyer (Domino Sugar,) Standard Oil
• Bushwick as Brewery Capital
• 1928: L-train opens
• 1970s: Riots in Bushwick
• 1980s: Pedestrian improvements along Bedford Avenue
• 1996: Improved L-train frequency
• 1990s: NYU, SVA, Parsons and Pratt students, along with artists, begin to settle
in semi-abandoned industrial buildings
• Late 1990s: Williamsburg reaches critical mass in late 1990
• Early 2000s: Retail rents increase, loft condo conversions
• 2004: Northside Williamsburg rezoned from industrial to mixed-use
• 2005-2008: Thousands of new construction units created
• 2006: Life Café (of RENT fame) opens in Bushwick
• 2008: Rents on Bedford Avenue hit $150 PSF
• 2009: 44 Berry and 38 Wilson open

9. Transit
• L-train is a crosstown train that runs across 14th Street in
Manhattan, stopping at 8th Ave, 6th Ave, Union Square, 3rd Ave and
1st Ave
• First stop in Brooklyn is Bedford (Williamsburg)
• East Williamsburg = Lorimer, Graham, Grand, Montrose
• Bushwick = Morgan, Jefferson, Dekalb
• Runs 24 hours a day, 7 days a week
• 1994: 16.9MM annual riders. 2005: 30.5MM annual riders. 2009?
• New cars, cleaner than average, on time trip notification

10. Hipster Demographics
• Difficult to quantify due to speed of
transformation
• Tens of thousands of post-collegiate, transient,
hipper than average people
• Williamsburg retains sizeable Polish population
although now mostly “hipstergrants” and under
30
• Bushwick is a heavily Latino with smaller hipster
population

11. The Hipster
• Under 30
• College educated
• Culturally aware
• Liberal or apolitical
• Green-friendly
• Gay-friendly
• Drug-friendly
• Fashion sensitive
• Parentally supported
– Generally graduates of top 50 schools
– Sizeable Ivy League/Seven Sisters/art school population
– Seen as the opposite of the “Murray Hill/Midtown East Set”
– Tastemakers, creative class, artists, casually employed, parentally
supported
– Less affected by recession

12. What Does a Hipster Look Like?
• Hair (head and facial)
• Fashion
• Art
• Sexuality
– Relative androgeny
– Loose sexual mores or definitions
• Music
• Body image
• Humor
• Body art

19. The Housing for Hipsters strategy
• Play the gradient
– Williamsburg = $1000 per head
– E. Williamsburg =$800-850 per head
– Bushwick = $650-700 per head
• Heads on Beds
– All rent is priced on a per head basis
• Reinforce with retail
– Create ancillary retail that attracts tenants
• Youth housing created by (relative) youth
– Know what your customer likes
– Follow design trends
• Walk to subway
– No more than .5 miles from L train stop

20. Williamsburg
• Nationwide hipster epicenter
• Bedford Avenue is central corridor
• Divided into two sections: Northside (traditionally
Polish,) Southside (traditionally Latino and Hasidic Jew)
• Great “natural” boundaries
• Famous hipster landmarks
• Hipsters are being pushed out along L-train due to
influx of “square” Manhattanites, Toll Brothers, etc.
• Condo prices leveling out at $650-800 PSF (compare
Manhattan at $1000)

23. East Williamsburg + Bushwick
• Rapidly emerging
• Recipient of Williamsburg emigrants (collectives)
• Centered on Maria Hernandez Park
• Underground art, music and film scene
• More “hardcore” than Williamsburg
• Was know as most dangerous neighborhood in NY in
1970s
• Suffered from riots, fire, blight
– 40% abandoned in 1978!
• Ongoing crime, property condition, foreclosure
issues
• New retail

25. Housing for Hipsters (rental)
• 44 Berry Street
– Conversion of 1919 New York Chemical and Quinine
Works Building (55,000 SF)
– 42 loft apartments
– 15,000 ground floor retail
– Lofts are 650-800 SF, designed with flexible layouts for
sharing, mezzanines, temporary walls, etc.
– Finishes are old New York meets minimalist art gallery
– Lobby design
– Amenities

26. Berry Floor plan

29. Housing for Hipsters (condo)
• 38 Wilson
– 15 affordable condominiums
– Parking on site (as required by DOB)
– Street-friendly
– Industrial metal skin, Ipe wood and white stone facade
– All 1-beds with potential for 2-bed conversion
– Simple, elegant, modern finishes (not $)
– Roof decks
– 3 blocks from Morgan L stop
– Priced from $259-325k
– FHA/HUD approved for 96.5% financing (little cash in with stimulus tax
credit)
– Marketing began May 2009, 5 in contract

30. Wilson Floor plan

31. Wilson Images

34. What Hipsters Want…

35. Layouts/Design
• Flexible plan
• New partitions/bedrooms
• Small private social spaces
• Large public social spaces
• Unique or odd spaces
• Translucent pocket doors
• Malleable palate

36. Finishes
• OLD
• Preserve original details wherever possible
• Subway tile
• Historic/evocative Lesson: $ on
• Raw finishes ≠
• Contextual absorption!
• NEW
• Minimalism—don’t over-embellish
• Showers not tubs
• Metal, glass, wood
• Industrial finishes and materials

37. Amenities
• Roof decks
• Retail/bars/restaurants in roll-out-of-bed
distance
• 24 hour markets
• Well designed lobbies and common spaces
• Odd balls: bocce, games, video screenings, art
galleries
• Parks, bike lanes, flea markets

39. Marketing to Hipsters
• Keep Calm and Carry on
• Ditch Your Landlord
• Matchbooks
• Business cards
• Neighborhood blogs
• Model apartments cum art galleries
• Don’t try too hard—try for the opposite of
development marketing
– Authenticity

40. The Market Today
• Rental market remains robust
– Rents down 10%
– Volume remains high
• Sales volume off 80%
• Sales pricing off 15-20%
• Shadow condo market
• Manhattanization of Williamsburg
• Bushwick migration

41. $$$
• Rent
• Financing
• Construction costs
• Cost per bed

42. Unique New York
• Rent stabilization
• Loft law
• 421a + J51
• The Speed of Sound
– Everything happens faster
– Neighborhood transformation in 2-5 years (rather
than 5-20 observed elsewhere)
• 24 hour transit
• The art of compromise (size, PTAC, etc.)

43. Retail For Hipsters

44. 22 Wyckoff
• Conversion of 10,000 SF auto parts storage to
24-hour grocery store, wine shop and bar
restaurant
• Uphill battle with zoning and DOB
– Fight to eliminate loading berth
• Metal skin

45. Winners and Losers
• Two sides to every story
• Gentrification
• The “problem” of self-bias
• What we (CNU) KNOW
– And our audience…
• Are we missing the big picture?
– Latino population growth vs. college graduate growth
– City vs. Suburbs
• The next out-migration?

46. The Future?
• Opportunity to redefine the American Dream
• Proselytize, lobby, penetrate sub-cultures
– Immigrant outreach
– Natural tendencies towards urbanism
• Big broken windows
– Fix urban schools
– Clean streets and parks
– Jobs
– Transit options
– Reverse urban disinvestment (esp in recession!)
• Stop simply preaching to the choir!

47. Conclusions
• Urbanism is naturally attractive to the “next”
generation
• Opportunity to keep new Americans in urban
neighborhoods
• Suburbs seem ancient/passé/stifling
• Increased opportunities to make money in
urban real estate
• Opportunity to make urban living the default
again

48. Ari S. Heckman
Cayuga Capital Management
ASH Co. Design/Build
HM Ventures
ari.heckman@gmail.com
227 West 11th Street, Suite 4
New York, NY 10014