Never doubt New York. Just when the real estate industry appeared soaked from downpours of pessimism, two pieces of news brought out the sunshine. Any notions that the current malaise could be long term were dispelled when Amazon chose Long Island City, Queens as one half of its new headquarters and Google announced they will significantly increase their Manhattan footprint.
The moment Amazon’s news was revealed, the condo gold rush was on, with brokers selling units sight unseen via text message and other’s packing client’s into vans for buying trips across the East River. With an expected 25,000 new jobs to be created in the condo heavy enclave, a short subway ride ride away from Manhattan, LIC has changed from a buyer’s to a seller’s market in an instant. It’s done for condo sales what the fictitious Willy Wonka announcing tickets to tour his factory did for chocolate bar sales.
The Wall St. Journal, told of scores of buyers being turned away after agents were overwhelmed.
“Buyers are hoping it will become the next Silicon Valley and want to be in on that,” a broker for a condo building in the area said. “Clients I hadn’t spoken to in seven or eight years started texting me,” Eric Benaim, president and founder of an LIC brokerage enthused. “I sold 20 apartments via text.”
Amazon’s news is only likely to encourage other companies to consider LIC home.
“The same thing happened in Midtown South and the Meatpacking District. Tech behemoths like Facebook and Twitter made those submarkets their homes. And then the mid-tier and smaller tech companies followed suit,” the in demand Benaim told The Real Deal.
The knock on effect for neighboring Queens neighborhoods could also be immense. Though condo prices in Long Island City are generally higher than the rest of Queens, well paid employees who don’t mind a train stop or two could buy single family homes with yards, basements and attics and start to transform neighborhoods like Sunnyside, and Astoria. Even Brooklyn and parts of Manhattan could benefit from the new residents.
It’s worth taking a deep breath before rushing out and buying condos in LIC, though. In the short term house prices are bound to increase but Amazon said it plans to build its headquarters in phases, with the first $5 billion spread out over a period of 15 to 17 years. That’s time to go house hunting in neighboring areas with trees and parks and spend cash on renovations.
Google seem set to add almost half as many new jobs as Amazon in Manhattan’s pricey West Village. Parent company Alphabet Inc is close to leasing or buy a 1.3 million square-foot office building at St. John’s Terminal, the Wall St. Journal reported. It would mean that both Silicon Valley juggernauts would employ a combined number of around 50,000 workers, an adrenalin shot in the arm for the real estate industry. Jeff Bezoz announced that employees will be paid an average wage of $150,000 which, is probably enough for a single person and definitely a couple to get on the real estate ladder in some fashion.
What Amazon and Google’s announcement does for New York, other than give it a short term confidence boost, as if it needed one, is continue the narrative of rebranding. Known once as a rough and ready city, where crime and poverty ran rampant, it’s becoming tech centric. Of, course, many would argue that gentrification and the increasing cost of living has come at a huge price socially and culturally. However, if it is to compete with other cities attracting Silicon Valley’s big shots and scores of newer start-ups, announcements like the ones from Amazon and Google are essential for its growth.