While Brooklyn has rapidly gentrified in the last decade and become the trendiest of the outer boroughs; it looks like Queens has been growing in popularity as well.
With the recent opening in Astoria of Kaufman Studio’s outdoor film set, the ever-popular MoMA outpost PS1, the extension of the 7 line, buzzed-about restaurants and new residential towers springing up, Queens is certainly having a moment. Plus, there’s the Museum of the Moving Image, the Paper Factory, which is a brand new hotel in Long Island City and bordering Astoria, and a slew of big retailers are moving to the borough.
The borough has some 60 large residential projects in the pipeline. But the majority of those are rentals because lenders are still not comfortable with issuing loans for condos. Some say there are not enough big, family-sized apartments for the young professionals flocking to Queens now to grow into later. But both of those things may be changing soon.
The reason you’re seeing so many rentals is that many of the sites being developed are very large, and larger sites are often more suitable as rentals than condos. More condos are expected as the neighborhoods develop. As this population matures, there will be a greater and greater demand for condos.
Rental rates have increased dramatically in Long Island City. And now that there are solid comps, it is easier for banks to get comfortable with making stronger loans. Condos in Court Square are selling for north of $900 per square foot, with individual units easily breaking $1,000 per square foot.
Hunter’s Point South is going to have an enormous influence on the waterfront area of Long Island City. It’s going to add a large population that will fuel an already vibrant retail strip along Vernon Boulevard. Linc LIC, a rental building, was opened this past year. That added 709 luxury apartments to the inventory in Court Square, and there are an additional 1,800 apartments planned for the area only by Rockrose Development. Tishman Speyer’s future phases of Gotham Center will have a huge positive impact on the Queens Plaza and Court Square areas. There’s a little over 9,000 units in total being planned in Long Island City alone.
Young people are more adventurous and are attracted to the amenity-rich, mass-transit-heavy projects in Long Island City, as well as the diverse array of arts and culture. Now those people are marrying and are opting to stay in the neighborhood rather than move out to the suburbs when the kids come along. The more established a neighborhood becomes the more expensive and generally the older the renters/buyers become.
Queens has become popular. This is mainly due to Brooklyn prices soaring through the roof and a steady influx of residents from Brooklyn and Manhattan moving to Queens over the past five years for good value for their money. What started as mainly Manhattan developers looking at areas like Long Island City and Astoria have moved further in along the 7 train, to Woodside, Jackson Heights and Sunnyside.
Since the majority of projects are currently rentals (rentals afford less risk for developers), there’s a growing demand for condos. The area is still growing and is definitely lacking amenities. Once the infrastructure develops, you’ll see the condo market grow. You have prospect buyers who want to purchase in Queens, yet there’s no inventory there. In addition, Long Island City lacks three-bedroom apartments, creating a situation where people are outgrowing their two-bedrooms, and there’s just nothing that exists.
Given the shortage of inventory the pace of absorption has now matched Manhattan projects.
If you look at land prices in Queens versus Brooklyn, Queens is cheaper while Brooklyn has run up substantially. Queens is also running up now but not at the numbers you have in Brooklyn. For example, two years ago, in Williamsburg, you had $150 to $200 per foot for land. And Queens was $100 a foot. Now, it’s $350 to $400 per foot in Williamsburg. And the Queens market is around $200. Things have increased for both, but things have increased faster in Brooklyn.