Long Island City is closer to Midtown Manhattan than Downtown, and in many ways farther along in its development than the much-touted revival of the Brooklyn waterfront.
This month, The Real Deal gathered a list of new developments underway in the borough, presented in a detailed map. Long Island City leads the way, with 11,550 apartments slated for development out of the 16,400 new units planned for the borough.
Long Island City is closer to Midtown Manhattan than Downtown, and in many ways farther along in its development than the much-touted revival of the Brooklyn waterfront.
The rising prices of Manhattan that made Brooklyn attractive only a few short years ago is set to transform Queens as well, making it the new borough for young professionals. New buyers may come to realize that Corona is not just a Mexican beer and there is a Murray Hill outside of Manhattan.
This month, The Real Deal gathered a list of new developments underway in the borough, presented in a detailed map. Long Island City leads the way, with 11,550 apartments slated for development out of the 16,400 new units planned for the borough.
Some 3,500 of those units – enough to house a small town – will come online in the next two years. High-profile developments include waterfront projects by Rockrose and AvalonBay, condo towers on the former site of the East River Tennis Club, and the transformation of the Smokestacks Building. A luxury project next to the Citibank tower, to be marketed by the Sunshine Group, serves as a portent for the area’s upscale trajectory.
“All of the critical mass is bought, signed, sealed and delivered,” said Barbara Corcoran, founder of the Corcoran Group, which is marketing several new projects in the neighborhood.
“Everyone is getting ready with every deal,” said Neil Binder, a principal at Manhattan brokerage Bellmarc, who grew up in Queens. “It will happen as one big effort, not dribs and drabs.”
Other development hotspots in the borough include Flushing, the most built-up urban area of Queens, where nearly 2,000 new units are planned. Developer Joshua Muss is planning a $600 million, 1,000-unit mixed-use development on the Flushing River. Boymelgreen and Vornado are also planning or competing for projects in Downtown Flushing.
Prices in Forest Hills, arguably the most desirable section of the borough, are appreciating more dramatically than Manhattan, brokers say. The neighborhood is also getting its first major luxury residential project in over a decade, designed by the same architect who did the Time Warner Center condominiums.
Astoria, for a decade an established outpost for renters priced out of Manhattan, is also bustling. Jackson Heights, the most ethnically diverse neighborhood in the city’s most ethnically diverse borough, is drawing buyers seeking value in its prewar apartments and tree-lined streets. Substantial high-rises are planned for nearby Corona and Elmhurst.
The Rockaways, rundown for decades, are also seeing condo development.
The survey didn’t look at areas dominated by single-family homes, such as Bayside or Little Neck.
Sounds great, but Queens still has a certain reputation, much as Brooklyn did a decade ago. Corcoran believes the only thing wrong with Long Island City in the minds of young urban professional Manhattanites is that it is called Queens.
“Right now if you say you live in Brooklyn, that is hipper than living in Manhattan,” added Binder. “An artsy name would speed the transformation in people’s minds. But it will happen.”
Market forces could take care of the image problem.
“The market is so hot in Queens,” said Donna Reardon, the branch manager of Prudential Douglas Elliman’s Bayside office. “I have been a manager of this office for the past 12 years and I have never seen anything like this year. The more that prices go up, the more people want to come.”
A look at some of the neighborhoods:
LONG ISLAND CITY
While the Brooklyn waterfront gets headlines, with the City Council last month rezoning 175 blocks in Williamsburg and Greenpoint, the transformation of Long Island City’s entire waterfront will happen sooner (see detailed story in this issue).
“It’s a market that is waiting to happen and it’s coming in the next year,” said Andrew Gerringer, managing director of Douglas Elliman’s Development Marketing Group, which is representing several projects there.
Units in new projects are expected to fetch anywhere from $675 to $800 a square foot, compared to Manhattan, where $1,000 a square foot for conversions and $1,300 for new construction is now a moderate price. Longer-term projects involve Rockrose’s seven buildings at the Queens West site, one of which will be done by summer 2006 and the rest over the next five or more years, according to Rockrose CEO H. Henry Eighanayan. Also planned are Silvercup Studios West, with 1,000 units, and an Olympic Village with 4,500 apartments if the city wins its bid for the 2012 Games. “If the Olympics come the place is going to be unbelievable,” Binder says.
More office buildings will also help fuel the area’s rise. Citibank is developing another $200-million, 475,000-square-foot office building next door to its existing 50-story tower, the tallest structure in Long Island City. Tishman Speyer is negotiating with the city’s Department of Transportation to develop a 600,000-square-foot office building on Jackson Avenue, the first of five buildings planned for the block.
FLUSHING
When Dottie Herman, CEO of Prudential Douglas Elliman, purchased the 100-agent Goldmark Realty company in Flushing last year, she said the neighborhood was the borough’s fastest growing “emerging market.”
Downtown Flushing, with a mainly Asian population, is the site of plenty of new development, and big players are starting to notice.
Most projects in the works only average around 20 units, but Muss Development, which built Brooklyn Renaissance Plaza, is planning a massive six condo and rental building project with 1,000 units. It’s part of a larger project with 725,000 square feet of retail space and a waterfront esplanade along the Flushing River. The first apartments will open in 2008.
“It will be a major economic stimulus,” said Joshua Muss, president of Muss Development.
In other major projects, Boymelgreen Developers is planning an 18-story, mixed-use project on the site of the former RKO Keith’s Theater, which could fetch prices in the $500 per square foot range. Vornado and Silvercup Studios are competing for a five-acre site in the middle of Downtown.
“Boomtown Chinatown has become a very exciting location,” said Binder. “Until 20 years ago it was suffering, then the Asian population moved in and that area has undergone a renaissance.”
ASTORIA
Astoria was once a suburb of industrial Long Island City when a housing boom began in Queens in the 1920s. But it has long been a destination for Manhattanites seeking bargain rents for the better part of a decade.
It’s also getting new housing stock as former warehouse space is converted to apartments by Pistilli Realty Group.
The former Eagle Electric Company factory and warehouse site will become a $30 million co-op complex with 188 apartments. The project includes the construction of three floors on top of the existing warehouse and a new building connected to the old plant.
“The warehouses have outlived their time,” said Joseph Pistilli, chief operating office of Pistilli Realty. “They are in the middle of residential areas, not like Long Island City.”
The other conversion by Pistilli is a residential condominium at the former Stern’s warehouse site at Ditmars Boulevard and 45th Street.
The 300,000-square-foot industrial structure was built by piano magnate William Steinway and will become 200 apartments by the end of the year, Pistilli said.
Broker Demetrius Partridge of Partridge Realty says contractors are paying up to $700,000 for old dilapidated houses and tearing them down. “They are essentially paying just for the land.”
The average starting price for a one family house in Astoria is $700,000. A one family attached house is $575,000 and up.
“There are so few homes for sale and such demand that in Astoria a little 18-by-45 foot deep house on a 100 foot lot has an asking price of $800,000,” Partridge said. “That’s what’s driving the market; there’s nothing available.”
Demand for condos is hot. “If I had 100 condos right now, I would sell them out,” he said.
Partridge, who grew up in Astoria, moved out to Long Island 20 years ago to raise his children, and now said he’s looking at moving back.
“The city built brand new schools here, a new state of the art elementary school,” he said. “The irony is I moved out of the neighborhood because of the decrepit schools.”
FOREST HILLS
The new Windsor at Forest Hills condominium is the first major luxury residential project in the area in over 10 years, according to developer Cord Meyer, though more are likely to follow. (The developer has a century-long history in the neighborhood. It bought 600 acres of farmland in 1906 and named the area Forest Hills.) Architect Ismael Leyva, whose projects include the residential condominiums at the Time Warner Center, is designing the building.
Property appreciation in Forest Hills recently has been substantial.
“I own property in Forest Hills, condos where the appreciation has been more dramatic than Manhattan,” said Binder. “Whereas Manhattan appreciation over the last few years has been 100 percent, in Queens it has been 150 percent.”
One-bedrooms generally sell for $200,000. Prices for an apartment in a high-rise on Continental Avenue might be 50 percent more, and prices generally go up with proximity to the train. Attached houses run in the high $600,000’s to $700,000’s, up from the mid-$500,000’s last year.
The most sought after area in the neighborhood is Forest Hills Gardens, a planned community with stately, Tudor-style homes and winding tree-lined streets designed by Frederick Law Olmstead Jr.
Nearby Rego Park is also seeing change. Giant REIT Vornado is betting on the future of the area, planning a mixed-use project with 450 residential units and 650,000 square feet of retail on the site of an old Alexander’s department store. The project generated controversy when Wal-Mart announced plans to open there in what would have been the national discounter’s first foray into New York. Vornado reportedly dropped Wal-Mart, and there are plans for a Home Depot now.
“Rego Park has continued to strengthen and has started to go through a resurrection,” said Binder.
JACKSON HEIGHTS
Ethnically diverse Jackson Heights, which is starting to see arrivals from hip Brooklyn neighborhoods, boasts wide, green streets and prewar apartment houses. In the 36-block Jackson Heights Historic District, one- and two-bedroom co-ops are available for under $200,000, and single-family homes start at $450,000. Further afield, neighboring Corona and Elmhurst are set to see new development, including the tallest residential structures (at 16 and 17 stories) seen in those neighborhoods.
ROCKAWAYS
Far Rockaway and Rockaway Beach is going to be the new hot area,” said Reardon.
“Developers are looking for rundown multifamily properties to convert, to tear down and build up.”
At least eight projects with more than 800 units are in the works on the long, thin peninsula south of Kennedy Airport. The Rockaways fell on hard times in the early 1960s, due both to the jet airplane and low-income housing built on the eastern end of the peninsula. The first new projects in the recent era began in 1999.