If you were even remotely paying attention to the news, In November of 2018, you would have learned that Amazon was planing on splitting their 2nd headquarters amongst two major cities: Arlington, Virginia and Long Island City, New York. Yes, you absolutely read that correctly, New York City! Not the outskirts, but one of the, now, more densely populated locations in the 5-boroughs, Long Island City (LIC)!
Now, not many of you will know where LIC is, or what’s the history of the area. LIC dates back to the 1600’s when Dutch settlers successfully ran hundreds of acres of farmland, but that’s not the history many area concerned about. Let me tell you a little about LIC from when I was a little kid… You simply had no reason to go through the area unless you were driving through the neighborhood to get to the 59th Bridge, worked at Silvercup Studios, attended LaGuardia high school, or worked in one of the many warehouses and city offices in the area. Fast Forward to the early 2000s, things started changing. New York City started re-zoning allowing for more residential spaces, developers started buying up old abandoned warehouses and factories and BOOM, enter the age of LIC we know today. One of the most notable apartments were literally RIGHT off the LIRR tracks, and off of the entrance/exit of the upper level of the 59th Bridge, Arris Lofts conversion of 2008. The building kept the theme of an industrial feel; in the early 1900’s it was used as an electric factory, but it was one of the first CONDOMINIUMS up for grabs in the area, emphasis on condo.
So let’s talk from a real estate stand point – why the sudden interest in LIC? Well, for starters it’s literally RIGHT off the bridge, tunnel and one subway stop into Manhattan’s east side. Being located in Queens, you have easy access to the cultural diversity of the borough and easy access to Nassau County, New York. Additionally two minutes on the Pulaski Bridge and BOOM you’ll find yourself in Greenpoint, Brooklyn (another rags to riches story we’ll explore in a later post) so really this little gem of a location is PERFECTLY situated.
So let’s fast forward to November 2018, and Amazon’s big announcement. Almost EVERY broker sent out pre-mature emails essentially encouraging their clientele to “buy now” in Long Island City or miss out on their chance. My inbox was FLOODED with brokers trying to capitalize on the announcement, but I sat back quietly, chuckled and advised my clients otherwise. I received 3 different calls from different past clients, plus one just curious Manhattan buyer I’m working with and here’s what I advised them… “don’t drink the kool-aid just yet.” Known large publications, both real estate and others publications were putting out articles also promoting sales in the area:
- Sparked Condo Frenzy
- Millenial Apartment Boom
- REAP Benefits (tax benefits for the company and employees)
Why was I skeptic? Well, lots of reasons. Let’s start with the fact that the area is now VERY densely populated with numerous rental buildings scattered throughout the “town” and even reach as far as Astoria. With so many rental buildings the competition for an investor would be brutal as some of these buildings offer world-class amenities such as luxury gyms, indoor & outdoor pools, simulator rooms such as golf and skiing, indoor sports courts, valets etc. And due to the competition, these very buildings offer INSANE incentives for renters, I recently closed a deal in Jackson Park, a building to which their spa and gym facilities alone are a selling point, yes, I said spa. They offered not only one month free on a one year lease, paid the brokers fee but they ALSO offered a year free membership to use all their facilities gym, pool etc. (spa services are extra of course). With over 200 rental buildings currently AND GROWING, you tell me why should someone, especially an investor, BUY an apartment there? Additionally, with all these buildings, hotels, restaurants etc. coming in and in effect causing all this growing traffic congestion, explain to me where Amazon was planning to build a headquarters that wouldn’t adversely effect the area? This was just a bad idea from day 1.
Well as of today, February 14th, Amazon gave NYC the best Valentine’s Day gift – they have officially backed out of their LIC agenda. As an agent, here’s the best advice I can give you, do NOT drink the kool-aid immediately when you see an opportunity. About half of the brokerage community now have to recant all these emails they sent to clients and the public glorifying this “amazing” opportunity to jump into investing in LIC and immediate areas. I feel as if I was the only broker who told their clients “no it’s not a good idea and here’s why.”
Agents, know the market, understand the neighborhoods you’re promoting, know the culture of the areas, understand the economics of the last twenty years of the places you target, and most importantly, DON’T JUMP ON BAND WAGONS RIGHT AWAY! You’re playing with other people’s money and you’re playing with your own reputation.
Be the expert, this is what you’re hired for!