Category Archives: Real Estate

HQ2 YEA/NAY, KATZ TO JVB TO O’LEARY, CHANGE A KUMON’, 80%?

57 and 33 story towers coming here

The only thing that is constant is change – Heraclitus circa 500 BC

POLLS can be funny, so I try not to read too much into them.  Let’s take one released this week showing 60% of Queens residents favor Amazon coming here.  Maybe. More likely 60% are neutral or “Don’t Know” where they stand on HQ2 in LIC.  If the deal really is even-handed that’s where the majority should sit under the bell-curve of a standard distribution.  But that doesn’t make headlines.

Well thought out analysis can also be buried in favor of sensationalism.  The most eloquent opinion piece I have read in the morass that has been written about HQ2 in the last month, was scripted by Seth Bornstein who heads the Queens Economic Development Corp. which despite its industrialist-like moniker is largely dedicated to helping out people from modest backgrounds. Having read his monthly letters for years, I can tell you that Seth knows Queens.  He also knows the history of New York City, which in a nutshell is that it’s always changing, and usually at a faster pace than the rest of the world.  Continue reading

YOTEL OPENING SECOND NYC LOCATION IN LIC

Little old Dutch Kills is getting a Yotel

Everybody go: Hotel, motel, Holiday Inn
You see, if your girl starts acting up, then you take her friend

I loved yodels as a kid, which is what I think of whenever I hear about the hotel chain Yotel.  Or maybe yogurt, or motels, but it’s definitely not mohels.  Or maybe the cool robotic arm they call a concierge that’s visible from the street at its 10th Avenue location.  Hal would be proud.  Or maybe I ask myself ‘Can you shoehorn a family of four into their standard mini-room?’  Anyway yesterday the company announced they’ll be opening their second NYC hotel in LIC.  No location was given but a little snooping indicates it might be Continue reading

Tagged

CONDO CRAZY IN LONG ISLAND CITY?

Not too many condos along the waterfront

YOU’VE undoubtedly heard that condos in LIC are selling like hot cakes and Open Houses are jammed post-Amazon.  There’s probably some hyperbole in there – that’s the news business (and real estate brokers) – and it’s important to remember any mention of tripling and quadrupling is off a very low base.  Yet for all the obvious reasons purchasing property in Long Island City has become the topic du jour month in NYC and worldwide.

Which is why I was attracted to a building in Astoria, which is located almost as far away from Long Island City as one can be in that adjacent neighborhood.  The listing that caught my attention is Continue reading

Tagged

BE CAREFUL WHAT YOU WISH FOR

Which side of the Basin?

WHAT if Amazon did an about face and bid adieu to locating HQ2 in Long Island City, stating that the rancor over subsidies, additional demands, and outright opposition to gentrification made it untenable.  How would that make you feel? Continue reading

Tagged , , ,

CITY HARVEST SITE IN HUNTERS POINT SOLD TO TF CORNERSTONE

Sorry Huck and Tom, no more shenanigans down by the creek

Sorry Huck and Tom, no more shenanigans down by the creek (click on pic for detail on City Harvest at left)

An 8-acre plot of land where City Harvest currently runs its operations has been sold to TF Cornerstone according to the New York Post.  Located at the very southern tip of Long Island City on Newtown Creek, it is adjacent to the “backside” of Hunters Point South Park.

The land is zoned to allow four 400-foot towers which can contain over 2,000 residential units, 1/3 of which must be affordable. Continue reading

Tagged ,

AMAZON HQ2 IN LONG ISLAND CITY, GOOD DEAL OR NOT?

Reactionary? Yes. misguided maybe, redirected for sure

Reactionary? Yes. Misguided? Maybe. Redirected? For sure

Since it cost a lot to win
And even more to lose
You and me bound to spend some time
Wondering what to choose

I have read the 32-page Memorandum of Understanding (MOU) between Amazon and NYC/NYS.  I have read most of what others have written on the HQ2 deal and incentives. I am a financial analyst by training.  Most importantly, I have lived in Long Island City for ten years and have closely tracked all that goes on here, both economically and non.  Despite all these attributes Continue reading

Tagged , ,

MIGHT AMAZON HQ2 OCCUPY THE PLAXALL SITE?

First let me state that every detail about Amazon’s locating half of their HQ2 in Long Island City is purely conjecture, including the possibility of their actually coming here, which Vegas currently handicaps at 1:4. Thus as much as I want to share more of my opinions on what, for better or worse, will be the most transformational news to effect LIC, I will hold my tongue until any official announcement. Because the devil is in the details.

Nevertheless considering the high probability (1:4 = Yes, not 4:1), I will entertain and analyze a rumor, even if it turns out to be a meaningless exercise – or completely wrong. That rumor is that Amazon will locate their headquarters on the Plaxall/Water’s Edge land – a possibility which has been mentioned in several articles, without any serious validation to my eye.

Anyway, there would be two major positives for Amazon to choose this site, and one major negative, plus a whole bunch of minor +/-’s that I won’t bother fleshing out here. Positive number one is that it will allow the company to build a campus from the ground up, tailored to what they need in terms of amenities and aesthetics for attracting today’s white collar workers. Positive number two is the free advertising given the full visibility of the waterfront by both everyone in Manhattan and all the tourists – whether they be on the ferry, Circle Line, or even viewing on TV. It’s a headquarters and a showcase. The big negative? It’s not really near a subway line. Everyone who works there would have to trudge 7-9 blocks through Hunters Point if they arrive by subway, or add a mini-leg to their commute via shuttle-buses.

Food for thought, and while we’re on that topic, here are some non-Amazon LIC links:

Adda’s Canteen Style DishesThe New Yorker pays homage to our new local Indian restaurant

Bryce Harper Moves Into a Long Island City Apartment Building Where 4 Mets Currently Livewouldn’t it be cruel if he signed w/ the Yankees?

Tagged , , ,

PREDICTIONS, RUMORS, THOUGHTS ON AMAZON HQ2 IN LIC

Two weeks ago I drafted a post on local property values in response to the headlines announcing LIC’s first billion dollar condo building. It questioned the viability of attaining $1 bil in an increasingly softening market. The Amazon HQ2 announcement blew that thesis out of the water. It’s a game-changer so back to the drawing board I went with some new real estate predictions, and while I was at it some other thoughts I had on HQ2 as well as some rumors.

Upon confirmation, raw land prices and development sites are immediately worth 25-75%1 more. Because all other costs (labor, materials, financing, etc.) are fixed, this is the only variable that moves so the total project only increases by 5-15%. This is obviously a huge boon for current land-owners.
Retail – 3+ yrs away before any impact on revenues for local retailers but all retail rent rollovers will incorporate an Amazon Premium, especially those near where HQ2 is actually located
Rental Building Owners – the announcement fully counters the current softness as far as refinancing goes. Owners can now do so using peak 2016-17 pricing
Renters – zero effect for the next 2-3 years. If softness persists, as it should with all the supply, concessions will increase but posted rent levels will stay flat. Then when Amazon starts moving in the concessions will disappear.
Homeowners – the effects will not be so immediate, but prices in LIC should firm 5-10% over the next 12 months. Going forward they will do 2-4% a year better than other NYC neighborhoods for the next five years.

For those looking to make a personal investment, if HQ2 is placed in Court Square or Queens Plaza, I believe the highest expected return going forward will be in Astoria and Sunnyside. It will be slightly less so in Greenpoint (but all those new developments just got a big lift), unless HQ2 is placed in Hunters Point. IF YOU WANT TO SCORE A BARGAIN START LOOKING NOW, and be ready to place a bid once confirmation comes.

As for where HQ2 will be located, that’s complete speculation at this point. One name thrown out for a turnkey foothold, is the Citi building where Citicorp’s departure in 2020 will open up one million square feet.

Or, if Amazon wanted to build a quasi-campus from the ground up, there are numerous parcels in Court Square/Queens Plaza that could be rezoned/repositioned and the multiple subway lines that merge there make it a logical choice.

Finally, there is a rumor that the Plaxall property on the waterfront would be a very attractive option, which when grouped with Water’s Edge and Vernon Swamp is where Amazon could build its own version of Hudson Yards on a highly visible (and large) piece of land…

Thoughts – now that the bake-off is seemingly over, I find it interesting that Amazon decided to completely discard the lower cost-of-living factor in choosing DC and NYC. While some think the whole exercise was a sham and the fix was in, I believe Amazon came to the conclusion they needed world class talent to grow going forward. For all that can be said about cities like Dallas and Atlanta, when you wake up in the morning you’re still in Dallas or Atlanta, not NYC.

The details about the deal the city/state struck with Amazon have yet to be revealed, and until they are I hesitate to give the company’s arrival my endorsement – this could be another instance of Foxconn in Wisconsin whereby the state basically paid for the factory and subsidized the workers to have it located there 2. Nevertheless this decision has the chance to be very favorable for both the company and Long Island City, not to mention NYC.

Yes, there will be collateral damage as it won’t be as affordable as before and there will be some really big winners who just won the lottery (the aforementioned land owners). As for crowding – particularly in the subways, an issue that I have been highly critical about, by placing the workers in LIC as opposed to Manhattan, it will fill the empty subway cars deadheading back to Flushing in the morning and Hudson Yards in the evening. Or better yet, commuters can easily walk or bike to work.

If the deal is struck and it’s reasonable, it will cement Long Island City’s standing as the best place to live (and work) in the best city in the world. And I guess that’s what Amazon thought too.

  1. completely back of the envelope so went with huge range, just wanted to emphasize who had the most to gain []
  2. or in LIC’s case guaranteed Sunnyside Yards be decked over or other egregious zoning upsizing []
Tagged ,

WHAT’S WRONG WITH RETAIL IN LONG ISLAND CITY?

Of course then there's...

Of course then there’s…

And if you say to me tomorrow,
Oh what fun it all would be
Then what’s to stop us, pretty baby,
But what is and what should never be

Given all the empty storefronts, anyone walking along Vernon Boulevard might wonder how Long Island City is the fastest growing city in the nation.  Of course excessive retail vacancies abound through many stretches of Manhattan as well, and “retailing” as a concept is under siege nationwide due to Amazon.

One of the problems lies with the entrepreneurs who start these businesses. Continue reading

Tagged ,

LIC REAL ESTATE MANTRA: ABSORPTION, ABSORPTION, ABSORPTION

Ze cranes, ze cranes!

Ze cranes, ze cranes!

“Everyone has a plan till they get punched in the face” -Mike Tyson

When in doubt, lead with real estate is a good recipe for consistency in LIC, or at least consistently churning out copy.  Earlier in the week I noticed a post in The Court Square Blog showing a huge tower in Court Square beginning to rise.  At completion it will be 67-floors and contain 802 condo units.  Originally slated to be close to 1,000 feet tall and ~80 stories it was cut down to its current size by the FAA.

Lo and behold at a Bisnow real estate conference about Long Island City this morning, Eric Benaim the CEO of Modern Spaces stated that the units would go on sale in mid-March and the expectation was that they would all be sold over a 4-year period.  Which leaves the only question: at what price?

That is the million billion dollar question, and Continue reading

Tagged