2015-04-29 / Features

LIC Real Estate Evaluated

BY THOMAS COGAN


When the LICP Real Estate Breakfast in April had ended, a groundbreaking ceremony was held a few blocks away at 44-28 Purves Street, near Thomson Avenue, where a 270-unit rental residential building will soon rise. In addition to the 270 units, there will be 75 parking spaces and extensive space for amenities, said the developers, Brause Realty and the Gotham Organization, and the builder, Gilbane Building Company. Manning the shovels are (l. to r.;) William DeCamp of Gilbane Building, Councilman Jimmy Van Bramer, Brause Realty President David Brause, Gotham Organization President David Picket, and Brause Realty Chairman Louis Brause. When the LICP Real Estate Breakfast in April had ended, a groundbreaking ceremony was held a few blocks away at 44-28 Purves Street, near Thomson Avenue, where a 270-unit rental residential building will soon rise. In addition to the 270 units, there will be 75 parking spaces and extensive space for amenities, said the developers, Brause Realty and the Gotham Organization, and the builder, Gilbane Building Company. Manning the shovels are (l. to r.;) William DeCamp of Gilbane Building, Councilman Jimmy Van Bramer, Brause Realty President David Brause, Gotham Organization President David Picket, and Brause Realty Chairman Louis Brause. The Long Island City Partnership held its 2015 Real Estate Breakfast in late April, featuring a four-person panel moderated by David Brause. It was here that Brause began the breakfast by saying he doubts if an “LIC bubble” is ready to explode or collapse. The quartet of residential and industrial developers did repeat the familiar narrative that prices in Long Island City, though they’ve increased greatly in the past few years, remain an amazing bargain compared to prices in Manhattan and even Brooklyn, to which Long Island City was repeatedly compared.

The panelists included Matthew Baron of Simon Baron Development; Jon Caplan of the New York Central Market Group, Jones Lang Lasalle; David Dishy of L+M Development Partners and Seble Tareke Williams of NYC Interboro Fund and Emmes Asset Management. Brause began by recalling that when Brause Realty Development refurbished the old automobile building in Queens Plaza in the 1990s, the rent was $4 per square foot and now it is more than $40, which led him to wonder about said real estate bubble. There was no great anxiety among the panelists, though Dishy said he had evolved from being enthusiastic about the “next hot neighborhood” to reality and appreciation of what’s needed in Long Island City, which would be density of retail and mixed use.

Baron said he has become familiar with Long Island City only since 2011. Like many others before him he was amazed by the access from Midtown Manhattan to Long Island City (LIC) and had an anecdote about discovering how little time it took him to get from one point to the other. He said that by comparison, LIC is far more amenable to all sorts of people than is Williamsburg because LIC is a transit hub, while the morning rush hour at the Marcy Avenue station in Williamsburg is a study in desperation. Dishy added to the critique by saying that Williamsburg simply isn’t as interesting as Long Island City.

He said he’s fascinated by the possibilities of all Western Queens, even without consideration of the rise of Cornell Technion on Roosevelt Island.

Williams said her company, Emmes Asset Management, deals mainly in commercial real estate in Queens, and residential in Brooklyn. A prominent property in Queens is Studio Square in Astoria, a building she called “great bricks,” with a great view of Manhattan. Another is Offices at Austell, formerly the Walls Zipper Factory, down at the western end of Sunnyside Yards at 47-10 Austell Place, between Skillman Avenue and 27th Street. She said she has managed to lure industrial companies to Long Island City from Brooklyn, where they are being uprooted by developers of residential towers.

Brause asked about more amenities – retail stores – for the Queens Plaza area and Baron said that “buy-in” is still needed. Head offices of large chain stores are not sure where Long Island City is, so they are reluctant to put their stores there, he said. Square-foot rates in the area were low at the beginning of 2014 but rocketed upwards in the next six months, perhaps contributing to anxiety among potential renters. Still, retail stores will be arriving, he concluded. “Green” energy was brought up also, and while all wish it well, there has been little advancement locally. Dishy spoke of the wind turbine on the roof of L+M’s building on Pearson Street, saying that it can generate power but can’t sustain the entire building. He said that though he has taken a lot of mockery for it (it’s been out of operation lately, he admitted) he defends it as a symbol of what can and should be.

The Sunnyside Yards and Mayor Bill de Blasio’s dream of affordable housing on platforms built over acres of railroad tracks drew some commentary. Williams said she would like to see some part of it produced in her lifetime, drawing laughter from several who apparently share the popular belief that it will take decades even to get started. Dishy said some part of it may be feasible, even without the massive platform plan. Baron said all the publicity about the mayor’s proposal simply reflects Long Island City’s great success in recent years.

Inquirers from the audience asked about absorption and reprised the anxiety that all this perceived success might soon collapse. Caplan thought that absorbing all these people into a neighborhood that previously had nothing like it is bearable. Queens’ vacancy rate is at about three percent now, while Manhattan’s is between one and two percent, he said. He also dismissed fear of a boom going bust. Elsewhere in the city, he said, setbacks owing to overbuilding have been short-lived and those places have rallied to new prosperity. Baron, however, worried about the cost of construction, saying that anyone underwriting today’s prices must think hard about where those prices might be tomorrow.

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