After news outlets began reporting that Amazon had narrowed down its search for its HQ2 to an even split between Long Island City, N.Y., and Crystal City, Va., speculation on how the addition of an estimated 25,000 jobs to an area would affect the cities’ economies.
But how would it impact the multifamily market in particular?
In Long Island City, rental and condo inventory is brimming with luxury options that rival Manhattan units, but at a lower price tag. New development rental accounted for 39 percent of the market in September, while apartments spent an average of seven days on the market, according to a Douglas Elliman market report.
“Long Island City in particular has been doing well for a long time,” said Gary Malin, president of Citi Habitats, a residential brokerage firm in New York City. “When you add a company like Amazon and what that means in terms of economic infusion to that neighborhood, it’s massive.”
Malin said many of the new residential housing that has been built over the last several years and continues to be built is “state-of-the-art.” By his estimate, there are around 1,500 condos in the pipeline and close to 10,000 rentals planned for Long Island City.
The commercial side has taken a shine to the neighborhood as well. Tishman Speyer has a massive office project in the works in L.I.C. with the JACX, a 1.2 million-square-foot creative office development that is already 70 percent pre-leased. One of those companies that has signed on is Bloomingdale’s, which will have 550,000 square feet of space at the development for 1,000 jobs it will move there.
“It will add a lot of energy to a neighborhood that’s already doing so well,” said Malin.
Just last week, Mayor de Blasio announced $180 million in new spending on Long Island City for transit and sewer system upgrades, something not lost on Peter Muoio of Ten-X Commercial.
“I don’t think its coincidental that the mayor announced increasing sewer systems and building schools,” said Muoio. “He’s potentially working with the MTA to position a Long Island Rail Road stop in that place as well. It seems to be that discussions must be toward the final situation.”
Location And Talent
Both Crystal City and Long Island City, besides having ‘City’ at the end of their names, are geographically similar. They are both separated from the downtown city centers of Washington, D.C., and Manhattan by a river, both are located close to major airports (in Crystal City’s case, literally next door) and they are both located on the outer rim of a major city.
The DC area has been a location that was heavily favored as a front-runner for Amazon’s HQ2 by some in the real estate industry, and it’s easy to see why. Microsoft recently purchased 322 acres of land near Dulles Airport, Apple recently announced it is looking to build a $2 billion campus in the region, and Amazon’s founder and CEO, Jeff Bezos, is spending $12 million to renovate a 27,000-square-foot home he purchased in the Kalorama neighborhood of D.C. in 2016.
Like Long Island City, the D.C. area has been building multifamily—a lot of it. The region is projected to deliver more than 29,000 multifamily units in the next few years, according to Daniel Peyton, senior vice president at Plaza Construction.
“A lot of this is feeding off cyber security, U.S. government, Department of Defense, national security kind of stuff,” said Peyton. “The area has a very highly educated workforce and a large tech workforce, which is also helping to attract people here.”
Long Island City benefits from its close proximity to midtown Manhattan and its plethora of transit options to get there. The Queens neighborhood is also a stone’s throw from the place New York City officials would like to see become a tech hub in its own right: Cornell Tech’s campus on Roosevelt Island.
“It’s kind of serendipitous,” said Muoio. “It’s about a two to five-minute ride on the ferry from Roosevelt Island to Long Island City. The connectivity is phenomenal.”
Though L.I.C. has grown over the last few years in several areas of real estate, one area it has continued to lack in is retail.
“But if Amazon does indeed choose L.I.C. as one of its HQ2 locations, that may finally change,” said Malin. “All the things L.I.C. is lacking to some degree, like retail amenities that make a neighborhood pop 24/7, you know that’s going to come,” said Malin, who compared the evolution of L.I.C. to Lower Manhattan, which has become a residential destination for many New Yorkers in its continued buildup since 9/11. “Slowly but surely, a lifestyle came.”
Source: Multi-Housing News