In beating the other major Manhattan brokerages to Long Island City, Prudential Douglas Elliman says it’s ahead of the curve, but at least one existing firm in the area said the brokerage behemoth is already too late.
Elliman announced Wednesday it would be joining a burgeoning real estate row on Vernon Boulevard in LIC, opening an office at 47-37 Vernon Boulevard, directly across the street from a Modern Spaces outpost that is situated next door to a NestSeekers International location. Modern Spaces is a locally based brokerage that specializes in the neighborhood while NestSeekers has had its office for five years.
“Elliman didn’t want to make the same mistake it did in Brooklyn,” said Rick Rosa, the executive vice president hired in November to run the office, referring to the firm being relatively slow to open a Williamsburg office. “We wanted to be there first.”
But as LIC’s wealth of boom-time inventory finally dries up, and little new condominium development exists on the immediate horizon, some wonder whether the brokerage came to town too late.
The firm had laid plans to open an office in 2007 and 2008, just as a slew of new developments were rising, according to CEO Dottie Herman, but the market fell apart and it decided to stop pursuing an office. Herman said developers told her they wanted Elliman to market their Long Island City projects, but that the firm needed a local presence.
Despite not having one, Elliman did pick up several new development marketing assignments at the time, however it has since been replaced at many of them, including the L haus, Industry and Powerhouse condos where Modern Spaces now heads the sales effort.
“They could have capitalized on it back then but now it seems like it’s too late in the game,” said Adrian Lupu, a senior vice president of Nest Seekers and head of the firm’s Long Island City office. “The market is getting so small that there’s room — but there’s not that much room. In the short-term I don’t see much business.”
But Herman said the move was not geared towards just the short-term. Elliman already has one office in eastern Queens, in Bayside, and wants a larger presence in the borough. The new office will serve areas outside of LIC, including nearby Astoria where the firm is the exclusive marketer for the 76-unit East River Tower. Pinning the timing of the office to the immediate supply of new developments is short-sighted, she said. After all, Elliman has plenty of offices in areas where new development isn’t sprouting.
“I’m opening the office now because I have the right person to run it,” she said, pointing to Rosa, a resident of the neighborhood since 1999 who has specialized in transactions there.
Rosa acknowledged that the current development inventory is limited, but there’s a lot to look forward to a few years down the line. He called it a young neighborhood without many resale opportunities, but pointed to the lack of available buildable land and to the bevy of renters filling up TF Cornerstone’s pricey waterfront buildings as sources of future business. The land will one day be home to condos, and the renters will eventually look to purchase in the neighborhood.
“Rental prices are very expensive here,” he said. “If you can afford to rent in Long Island City you can certainly afford to buy.”
Rent for one-bedroom apartments in doorman buildings averaged $2,789 per month in 2011, a 10.5 percent year-over-year increase, according to a recent Modern Spaces market report.
Rosa suggested buyers are tired of the existing inventory and are awaiting a new round of development. Establishing a physical presence is key, because developers see the community as a small, tight-knit one in which marketers must become ingratiated. And once that new development wave breaks, Herman noted, the firm now has Susan De Franca, the former head of Related Companies sales, to lure developers into choosing Elliman for new development in Queens.
“I’m not looking for a quick dollar,” Herman said, adding that the move will help it serve developer clients. “I’m trying to build a firm and position it for future growth.”
But for now, Modern Spaces and Nest Seekers both said they welcome Elliman to the neighborhood. Modern Spaces CEO Eric Benaim said his firm does a lot of business with Elliman, and the presence of a large name firm would only bring more attention to Long Island City’s growing real estate market.
His firm probably isn’t accustomed to competing with a company with as much money to pour into marketing as Elliman, Rosa said, but Benaim didn’t sound concerned. “We have a couple hundred [rental] units coming online this year, and 600 to 700 [rental and condo] units to market next year.”