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Amazon return paying off for LIC

It was a cold Valentine’s Day in more ways than one when Amazon boss Jeff Bezos broke up with New York, withdrawing from a plan to open a second company headquarters in Long Island City.

The news left locals in shock, in some cases pleasantly, in others aghast and brokenhearted.

ERIC BENAIM

Eric Benaim, the CEO of Modern Spaces brokerages, who lives and works in Long Island City, was one of the latter group. However, the company’s premature departure was bittersweet for the veteran broker, as suddenly, even without the promise of 25,000 new jobs, the once sleepy waterfront community was teeming with life.

Benaim estimated that as buzz surrounding the possibility of Amazon coming to the western Queens neighborhood began, even before it became official, traffic to open houses in the area increased by 400 percent. Around that time, last November, he found himself showing around 100 units a month.

“No one confuses us with Long Island, anymore,” said Benaim, who has lived in the community since 2006. “And that was forever.”

The action slowed down some around the holidays and in January, but rebounded following the February announcement of the e-commerce giant’s change of heart.

The following week, recalled Benaim, he saw sales spike by 16 percent, with 15-20 people coming to an open house weekend. In the past, he would typically see 6-8. His theory is that the slowdown had more to do with the holidays, which is typical anywhere in the city.

As for the renewed interest in February, Benaim said those who were considering moving to the community didn’t suddenly get turned off by it just because Bezos had. If anything, it was the opposite.

“As soon as Amazon said it was leaving, people thought they would have an opportunity in pricing,” said Benaim, adding that developers at that time had to start pricing lower than they’d hoped to do than when they were expecting an influx of Amazon employees. Additionally, buildings are still offering move-in incentives.

“But prices have absolutely gone up,” said Benaim, adding that so has the volume of sales.

In the post-Amazon months, Modern Spaces sold 415 units. This number already tops all the firm’s sales in 2018 of 258 units. Currently, the firms is marketing the 67-story, 762-foot Skyline Tower in Long Island City, which, once construction is complete, will be New York City’s tallest building outside Manhattan. The Citigroup Building previously held that title at 673 feet.

SKYLINE TOWER

At Skyline, Modern has sold $223M million worth of condos since the project’s soft launch in May (25 percent of its 802 units.) Throughout the building, units run from $500,000 to $4 million. Developers, Risland Holdings, FSA Capital and United Construction and Development, have committed to funding a $17M new entrance to the Court Square subway station at the base of the building, which serves the E,M, G and 7 lines.

Along with Skyline, other new developments include One LIC, a 110-unit tower developed by The Lions Group where apartments rent for $3,060 for studios to $5,475 for three-bedrooms. In August, ground was broken for JMH and Mettle’s 36-20 Steinway Street, which was initially intended to be a hotel but has since turned into a 143-unit rental building.

Silverback Development is building HERO LIC, a 109-unit luxury condominium on Queens Plaza South that’s the developer’s first venture in Long Island City.

Marketing the building, which just became effective with 15 percent of the units in contract, is Ryan Serhant of “Million Dollar Listing” and his team from Nest Seekers.

RYAN SERHANT

Serhant, who sold some of his first homes in Long Island City in 2009, is well aware of how much the community has changed since then. “You’d be by yourself,” he recalled, of buyers. A decade later, developers can’t seem to break ground fast enough.

But even with all the new development, Serhant isn’t worried about the possibility of a glut of product, believing the current volume to be enough to meet demand and sell (“if priced correctly”) while giving buyers options.

“What’s fun is we’re seeing a lot of buyers from Manhattan,” he said. “They’re excited about the amenities and the lifestyle. You have Manhattan-style tower and Manhattan-style amenities at a fraction of the cost. Why would you turn that down?”

Serhant credits the increasing interest in Long Island City not to the Amazon effect, but the fact that other areas are getting more expensive and there is still value to be had in Queens — while it lasts.

“You can get a penthouse for less than $1,400 a square foot. Where in Brooklyn are you going to get a doorman and open views (for that price)?”

HERO LIC, he added, has amenities such as a zen garden and a rooftop deck with a grill and fire pit. The owners have also put out an open call for concept sketches for a planned mural or installation to be inspired by “the creative energy of the LIC and NYC community,” as they recently put it in a press release.

Proximity to Manhattan has naturally also been a draw for the neighborhood. “In one stop on the 7 train you can be at work if you work in Manhattan,” said Serhant.

Then, there’s the fact that businesses have also been discovering Long Island City, which used to be mainly industrial.

Earlier this month, The New York Times moved 350 of its employees to three floors of Court Square Place in a deal that brought the office building to full capacity.

“A lot of different industries are coming here,” said Serhant. “Now you have a lot of jobs that have been relocated to Long Island City for better office spaces that are less expensive.

There’s also far more interest from people who previously wouldn’t have considered the area or even Queens at all.

Benaim can recall a time, not long ago at all, when Modern Spaces clients in Long Island City were mostly from the community, or Astoria, with only 10-15 percent of buyers from other areas. Now, the majority of buyers are from other boroughs as well as New Jersey.

The neighborhood has even managed to benefit from Hudson Yards, where business owners have been referring their employees to Long Island City as an affordable alternative to the notoriously pricey West Side development.

Still, Long Island City has challenges to overcome. Benaim noted that the retail sector is struggling, which is one of the reasons he mourns the loss of Amazon.

“Where the Amazon campus was supposed to be, if it happened, it would have made it a 24/7 community where you go to live and work,” said Benaim. “On Vernon Boulevard, our main street, it’s not heavily trafficked.”

Modern Spaces has arranged leases for a handful of retail tenants recently though, including a Chinese restaurant, a dance school, a spa and a barbershop.

Meanwhile, even before Amazon showered Long Island City in free publicity, the neighborhood had been standing on its own, even getting named in a 2017 New York magazine story as the fastest growing neighborhood in the country.

MIKE SCHULTE

Citi Habitats broker Mike Schulte, a native Queens resident who currently has a number of listings in LIC, said he feels the Amazon effect was temporary — causing a spike in sales and prices that lasted as long as the news stories did.

“Because,” he said, even when the deal was on, “none of those jobs were coming to Long Island City any time soon. It’s not like 25,000 people were showing up. The Amazon thing was a momentary blip.”

Temporary benefits he noticed included a spike in rentals and sales of “pent up condo inventory.”

Schulte’s now seeing one-bedroom apartments averaging $650,000-$1.5 million in price and two-bedrooms from $800,000-$3 million. This week, he listed a one-bedroom on 47th Avenue, on a side street for $699,000 and got four inquiries within the two hours of the listing going live. Rents for one-bedrooms range from $2,700-$4,000 while two-bedrooms, which there are far fewer of, tend to rent for $3,600-$4,500.

The community’s growth, from what Schulte’s seen, has inched along over the past few years. He credits the growth to changes across the board in how people work — plugging in remotely and making a Manhattan location less important or not at all.

Then for others, as Serhant has seen, it’s the opposite with the proximity to Manhattan at a lower price point being the draw. Though not cheap, especially now due to most of the listings being high-end new development, Schulte pointed to the economy doing well thanks in part to job growth.
“There’s an increase in $80,000-$120,000 starting jobs in the finance world,” he said.

Other changes he’s seen over the years include the fact that housing along the East River no longer commands the highest prices just for being on the waterfront. Luxury units in new developments in Jackson Park and Queens Plaza can cost just as much.

The vibe from all the new development has given Long Island City what Schulte describes as a “more manufactured, Miami feel.” It may be fortunate then that newcomers aren’t necessarily coming for a New York vibe. In some cases, they’re only in the city for their jobs, anyway.

“I don’t think anything is predominantly New York, anymore,” said Schulte, adding that even within his own team of agents, a crew of 10, only two are native New Yorkers. “The New York of the 80s and 90s was not a place people were coming to,” he said. “They weren’t coming to Long Island City; I can tell you that.”

These days, the buyers he’s seeing are looking at their homes more like investments and he is confident the proximity to Manhattan will continue to drive prices north.

“We’re seeing the same thing that happened in Williamsburg 15 years ago,” said Schulte, “but this is on the Queens side.”

For brokers thinking of jumping into the market, Serhant recommends they take some time to get familiarized with the area, work in a team and “prepare to work your butt off for a few years.”

That said, Serhant hasn’t found selling in Long Island City any different from selling in pockets of Brooklyn or Manhattan that have undergone transformations.

“West Chelsea did not look the way it does now 10 years ago or 20 years ago. Things always change and that’s the great thing about New York,” he said. “The appreciation is going to happen around you whether you like it or not.”

Some neighborhood stats according to censusreporter.org: Queens Community District 1: Long Island City and Astoria together currently have a population of around 164,300 with a median age of 34.8 and median household income of $66,382. Per capita income is $36,921. Median property value of owner-occupied housing units is $810,000 and 36.8 percent of the residents are foreign-born.

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