What Amazon Means for Long Island City
Posted November 23, 2018 10:04 p.m. EST
NEW YORK — Hopes are high in Long Island City that Amazon’s plan to open a new headquarters there will bring tens of thousands more residents to a Queens neighborhood that was once heavily industrial but now has a mix of row houses, shiny towers and a slowly growing collection of residential staples like grocery stores and pharmacies.
The first Amazon employees will arrive in January, but because the company will add them gradually, with a goal of 40,000 hires by 2034, Long Island City won’t exactly balloon overnight. And of course, some employees will decide to find a home in another area anyway.
Long Island City has been one of the busiest neighborhoods for new construction in New York, according to Localize.city, a building data site. In the first six months of 2018, about 3,000 apartments were completed, representing about a quarter of all the new units in the city, and another 3,300 apartments are expected to come to market there by 2020.
But in the weeks since announcing its move — one marked by contention over $1.525 billion in financial incentives from the state of New York — Amazon has already had an impact on Long Island City’s residential market, according to brokers, developers and residents.
Buyers are flocking, developers are circling and prices are rising.
“Once the news leaked, showings went up,” Kerry Walton said of her two-bedroom, two-bath condop, which is listed for $815,000. The apartment was listed last spring for $885,000, then had a few price reductions because of the tepid market. The two offers that came during the springwere too low, said Walton, 75, a retired medical-school teacher now living in Cape Cod.
But a few weeks ago, interest in the unit exploded. Walton said she began receiving a flurry of emails from her doormen letting her know that brokers were visiting. Then, in mid-November, an acceptable offer came in, which she wouldn’t specify because a contract hadn’t been signed yet, but made her “happy.”
If there is a wider pool of buyers in Long Island City, it’s mostly investors — many from overseas, who are looking to cash in down the road through sublets, said Eric Benaim, the chief executive officer of Modern Spaces, a local brokerage. Modern Spaces is already working with four Amazon employees, some from Seattle, home to the retail empire’s current headquarters.
During the Nov. 11 weekend, a few days after reports that Amazon had chosen Long Island City as the site of one of two new headquarters following a 14-month nationwide review, open-house traffic there spiked 400 percent at existing and new apartments, Benaim said. It was equally robust the next weekend. Other firms, like Halstead, saw a more modest, though still significant, increase of 250 percent.
“It’s a feeding frenzy, and I’ve never seen it like this,” said Brian Dusseau, a Halstead agent who has worked in the neighborhood since 2002. And the surge reverses what had been his “roughest year.”
“A lot of people are focused on the Amazon workers that are coming,” said Dusseau, who is working with one of them. “But the fact that Amazon is basing its headquarters here is like a security blanket. It’s making people comfortable buying again.”
And developers are gearing up for the new demand.
This month, Galerie, a 182-unit condo at 22-18 Jackson Ave., will file required paperwork with the state to hike pricing, according to Brendan Aguayo, a managing director at Halstead Property Development Marketing, which is handling sales. Another hike is expected in December. About half the units at the under-construction building, which has mostly one- and two-bedrooms, have accepted offers, Aguayo added, with 33 deals in the past two weeks alone. Amazon employees account for two of those deals. Prices at Galerie start at $550,000.
Likewise, Corte, an 85-unit condo on 44th Drive where sales have been underway since July, has raised prices by 10 percent post-Amazon, and will raise them again, Benaim said. The Bond, a 42-unit project on 11th Street, has raised prices twice, and increases are also expected at the condo Craftsmen Townhomes, whose sales team accepted an offer from an Amazon buyer last week, according to Benaim.
Tweaking prices in the midst of marketing a project is not that unusual, but it’s rarer in the weeks before the winter holidays. It’s also been uncommon as of late in Long Island City, brokers say, where the development market has been weak.
In the third quarter, the average new condo sale price in Long Island City was $976,000, according to Halstead. That was down from an average of $1.32 million in the previous quarter and also shy of the $1.01 million average in the same quarter of 2017, the firm said.
The average monthly rent for one-bedrooms across Long Island City is $3,100, according to StreetEasy.com. The average for two-bedrooms is $3,900.
Eager to embrace an Amazon wave, developers are also dusting off old plans. The Durst Organization, one of the city’s largest developers, hopes to build on a huge site it has controlled for years, a Durst spokesman said. The site, at 44-02 Vernon Blvd. near Anable Basin, can accommodate 1 million square feet of apartments.
Anable Basin, a low-rise medley of docks and warehouses, is where Amazon intends to build a sprawling office complex that could total 8 million square feet — and possibly a helipad, according to state documents.
“Amazon planting a flag is fabulous for the entire neighborhood,” said Alan Suna, the chief executive of Silvercup Studios, the Long Island City movie facility that also develops apartment buildings, like the Harrison, a 120-unit condo on 44th Drive. Suna was among the local business leaders who worked on the Amazon pitch. What’s There Now
Despite two decades of residential strides, much of Long Island City still looks like a work zone.
Taxi garages dot blocks scattered with metal foundries, tile shops and the Empire City Iron Works. The sea of asphalt at the junction of Jackson Avenue and Vernon Boulevard functions as a free-for-all parking lot. Jutting out of Borden Avenue, near gleaming apartment buildings, is a Queens-Midtown Tunnel ventilation shaft.
Still, development has proceeded energetically, especially in two pockets — on the banks of the East River in the Hunters Point section; and in Court Square, sandwiched between the Edward I. Koch Queensboro Bridge and the Long Island Railroad tracks.
In Hunters Point, the thicket of gleaming towers by the river began to take shape in 1997 with the construction of the Citylights condop, and filled out in subsequent years with five contributions from the Elghanayan family, a major Long Island City builder.
Among their high-rises are Nos. 4720, 4545 and 4610 Center Blvd., rentals that are operated by TF Cornerstone, a family subsidiary. The cluster of buildings, which looms over the famed waterside Pepsi-Cola sign, offer ample amenities, but the area has just a handful of bars, restaurants and markets. With a pair of ferry docks, the enclave can feel closely tethered to the place it faces: Manhattan.
Hunters Point is also awaiting the arrival of 5,000 new, mostly affordable apartments, courtesy of the mixed-use project Hunters Point South. A popular park is open there today. TF Cornerstone will partner with Amazon to develop a portion of Amazon’s office complex, which will sit on a large site where TF cornerstone had been planning offices, workshops, stores, a school and apartments under a 2017 deal with the city. Most of that construction, including the school, is on track, according to TF Cornerstone, though the housing is no more.
Further inland at Court Square, a disparate blend of offices, apartments and municipal buildings nuzzles the bridge’s ramps. In addition to whatever it builds in the Anable Basin, Amazon has leased 1 million square feet of the office building at One Court Square, the 1.4 million-square-foot, blue-green spire formerly known as the Citigroup Building, where Amazon is expected to start moving employees early next year.
Rockrose, another Elghanayan firm, has finished or is at work on four rentals in the area, with 2,600 apartments. Among them is the Cove at 43-12 Hunter St., a 130-unit, 18-story offering to be completed next year. Eagle Lofts, with 790 units at 43-22 Queens St., is leasing; one-bedrooms are around $3,800 a month, with a free month’s rent offered as a concession.
Rockrose will likely raise rents, but first Amazon workers need to arrive, said Rockrose President Justin Elghanayan. “It will take a while before the effects filter in,” he said. Elghanayan's projects are hardly alone. Densely packed into this area, which was rezoned in 2001, are more than a dozen other residential spires, mostly rentals. There are condos too, like Skyline Tower, an 802-unit, 778-foot giant on 23-15 44th Drive from developer Jiashu Xu that was a few floors out of the ground on a recent afternoon.
Retail has been limited in Court Square, but a gourmet grocery, Foodcellar and Co., opened on Crescent Street in 2015. Xi’an Famous Foods, the trendy restaurant chain, will open on Jackson Avenue in a few months, as will City Chemist, a highly anticipated drugstore — both in Rockrose buildings.
Unlike previous retail tenants, who enjoyed below-market rents in a Rockrose effort to cultivate a scene, future rents “will be more landlord friendly than before the Amazon announcement,” Elghanayan said.
While development has been clumped in two compact sections, it has begun to spread out. New buildings are slowly popping up north of the bridge, toward Astoria. That section is also home to Queensbridge Houses, the nation’s largest public-housing development.
But in the middle of the neighborhood are a stream of rentals and some smaller-scale condos like the red brick Decker, on 44th Drive, and a row of three town houses on 47th Avenue, containing 18 apartments.
While not as rich in historic buildings as other parts of New York, Long Island City does offer a single-block historic district, along 45th Avenue, between 21st and 23rd streets, which features neat rows of prewar town houses. A two-family there recently sold for more than $2 million.
Shorter three-level versions are nearby, on 23rd Street, in the shadows of the elevated 7 train tracks, and also on 11th Street. Restaurants dot Vernon Boulevard, too, like a local outpost of Corner Bistro, the West Village burger joint, and the modernistic Bellwether, which opened this year. Nearby, Murray Playground attracts families, and soccer squads.
“It has completely changed,” Walton said of the neighborhood, to which she moved in 1998. And Amazon will accelerate more growth. “The people will be there, so the businesses will follow. You just have to be patient.”