Though Long Island City’s residential building boom has been the source of some consternation, Amazon potential deal to put half of its HQ2 in the neighborhood could turn that narrative.
“I actually had some concerns about the inventory in that area,” said developer George Xu, who described the pace of development as “senseless.”
“I would not be worrying about the Long Island City area anymore,” he said.
There’s a projected 11,700 units to come online by 2020, according to the Long Island City Partnership. So even if 25,000 Amazon employees doubled up two people to an apartment, there still wouldn’t be enough supply in the pipeline to accommodate them all.
Already, prices in Long Island City have been on the upswing. Asking rents are around $65 per foot today, up from the mid $50s per foot a year ago and $35 per foot 10 years ago.
And speculators have jumped into the market. Stribling & Associates data shows that one-third of condos sold between January 2017 and August 2018 were purchased by investors. That compares to just 8 percent of investor-owned condos sold between 2006 and 2010.
“Investors were already here and favoring Long Island City over Manhattan because the price point is lower and you’re only a subway stop from Manhattan,” said Stribling’s Patrick Smith.
For those reasons, Rockrose Development was among the early developers who bet on Long Island City, where projects include Linc LIC and Eagle Lofts, a 790-unit rental where studios start at $2,800, according to president Justin Elghanayan.
Today, Elghanayan said, most of the big sites are built or in play. “We’re in the middle of a big wave of development,” he said, “and I would say there’s one more wave out there after this current one.”
There’s no shortage of projects coming down the pike, featuring both rental and condo units. For example, Stawksi Partners is planning a 66-story, 920-unit rental tower on 24th Street with 920 units. The Durst Organization’s Queens Plaza Park, a 958-unit rental building, is slated to become the borough’s tallest tower at 710 feet. And just last week, developer Chris Xu got approval from the state Attorney General to begin sales at his 802-unit Skyline Tower in Court Square, the first $1 billion condo project in the borough.
Marcus & Millichap’s Eric Anton likened Amazon’s move to China’s plan to extend infrastructure outward to countries in Europe, Asia and Africa.
“It would be the Belt and Road project for New York,” Anton said, pointing to how Amazon’s move will radiate outward to other parts of the city.
Long Island City, Anton pointed out, is just a short ride on the 7 Train subway to megaprojects on the Far West Side like Hudson Yards and Manhattan West, where Amazon currently has its New York offices.
“If indeed they’re bringing that many people to Long Island City,” he said, “it’s the biggest success for New York in 10 years.”