BY THOMAS A. DONOVAN
On January 24, my team at B6 Real Estate Advisors and I hosted a panel to discuss the state of the market in Long Island City and the looming Amazon HQ2 effect.
Some of the highlights we discussed were the quality of transportation, investor feedback on opportunity zones and the growth of the neighborhood.
Even though Amazon is not going forward with its HQ2 in Long Island City due to political red tape, they brought the area to light and put it on the world stage, showing all the advantages the neighborhood has to offer.
Real estate has always been about “location, location, location,” but recently, with the boom in Long Island City, it has created a new phrase, “location, location, transportation.”
The neighborhood features amazing access to all forms of transportation, such as the LIRR, numerous bus and subway lines, and the Astoria/Long Island City ferry, which create arteries that lead to Manhattan, Brooklyn and the Bronx.
The combination of Long Island City’s proximity to Midtown Manhattan and quality of transportation options provide quick and easy access to the rest of New York City and its airports, and will continue to be a driving force in the growth of the neighborhood.
Recently, approximately 116 blocks of Long Island City was designated as a Qualified Opportunity Zones. These Opportunity Zones, which were put in place under the Tax Cuts and Jobs Act (TCJA), encourages investment in specific economically distressed communities.
It creates tax benefits for investors, and while we still have not seen the full effects of these Opportunity Zones, they have added to the attractiveness and desirability of designated areas.
The purpose was to not only spur development, but also to encourage businesses to relocate and grow in these designated zones. While we have not seen an increase in overall prices, we do believe it increases the attractiveness of properties for certain investors and owners.
With the combination strong transportation and Opportunity Zones, there are approximately 12,000 new housing units currently being built on top of the 17,000 units that have recently come to market.
In addition to the apartments, there are numerous new restaurants, bars and retailers opening. The growth of the area has also brought the need for additional office space.
One of the largest office developments in Queens is the Jacx office building in Queens Plaza. It is currently under construction by Tishman Speyer, which has 1.2 million square feet of creative office space.
The Jacx has commitments from Macy’s and WeWork to occupy over 500,000 square feet, and it will feature a one-acre park that will serves as a creative hub, a café pavilion, and community space that will host outdoor events like theatre, music and dance nights.
Long Island City will continue to prosper, even without the 25,000 jobs from Amazon. It is a viable location for people to live and for businesses to grow. There is a demand for neighborhood retail, big-box retail and local services with new creative office spaces opening to help support this growth.
All this development, coupled with the overlay of the designated Opportunity Zones and quality of transportation, has facilitated new businesses moving to Long Island City as a long-term growth vehicle.
I am optimistic that Long Island City will grow into a significant lifestyle and business destination within the city. The sky is the limit.
Thomas A. Donovan is partner and vice chairman of B6 Real Estate Advisors.