Well before Amazon announced its plans to pursue a second headquarters in Long Island City, the Queens neighborhood was among the fast-growing real estate markets of NYC.
Major players in the real estate industry such as Durst, The Lightstone Group, Rockrose Development, Tishman Speyer, RXR Realty and TF Cornerstone have set their foot on the once-crumbling industrial neighborhood and secured millions of dollars to finance massive commercial and industrial projects that promise thousands of rental units to hit the market over the time span of up to five years.
To some extent, the gradual transformation of LIC exemplified Mayor Bill de Blasio’s vision of creating a “Tale of Two Cities” across the five boroughs.
Yet, Amazon’s snafu announced last week still stunned the LIC real estate market.
Chairman and CEO at The Lightstone Group, David Lichtenstein, dubbed Amazon’s about-face on its LIC HQ2 plans “the worst day for NYC since 9/11,” blaming elected politicians who voiced their strong resistance and stymied the deal.
With Lightstone owning two multifamily luxury rental properties in an LIC neighborhood – including a 413,000-square-foot, 428-unit building just a couple of miles from what was going to be Amazon’s LIC campus – Lichtenstein undoubtedly felt the staggering financial impact of Amazon’s abrupt pullout.
Unsurprisingly, Lichtenstein is not alone. Many real estate figures echoed his sentiments on the broken deal.
EVP Seth Pinsky at RXR Realty, another major player in the NYC’s real estate scene, said to The Wall Street Journal: “I think for some of the people opposing the project it was kind of a game. They enjoyed being the center of attention and having their statements tweeted and retweeted, but this isn’t a game.”
RXR Realty owns, among others, the 330,000-square-foot, seven-floor commercial property Standard Motor Products Building that would have become Amazon’s neighbor should the deal have gone through.
The idea of being close to Amazon’s HQ2 is too desirable to resist and definitely not a game in the NYC commercial real estate market. Indeed, a real-estate frenzy ignited over LIC upon Amazon’s November announcement.
More than 30 commercial and multifamily properties have changed hands since Amazon announced its LIC plans, according to WSJ. Now that the retail giant has ditched its plans to pursue a LIC HQ2, the frenzy has come up short.
And it doesn’t take a real estate professional to discern either the prospect of property value hikes thanks to Amazon’s upcoming presence or the financial implications of Amazon’s turnaround months later.
Having noticed skyrocketing interest and climbing asking prices in the area following Amazon’s November announcement, Nancy Wu, StreetEasy’s economic data analyst, said she expects “asking prices and buyer interest to fairly quickly revert back to their pre-announcement levels” as buyers have already started “backing out of their plans.”
Provided that LIC has been emerging as the burgeoning real estate market of NYC well before Amazon’s era, Amazon’s about-face on its LIC HQ2 plans certainly did not turn the LIC real estate market upside down.
However, Amazon’s presence could have accelerated the LIC transformation at an exponential rate. And it is safe to say that its abrupt snafu has caused the LIC real estate market a bit of a stroke.