June 19, 2014 By Christian Murray
Several of Long Island City’s leading real estate experts believe that developers will start focusing on building condos now that the neighborhood is starting to mature.
Developers have largely focused on building rental units since coming to the neighborhood a little over a decade ago. For instance, TF Cornerstone has built six out of its seven waterfront properties as rentals. Rockrose, too, has focused on rentals since it started building in Court Square.
However, this focus is likely to change.
“You have all these renters coming in who are falling in love with [Long Island City] and are getting invested in it,” said Justin Elghanayan, president of Rockrose, who was a panelist at the LIC Summit on Tuesday. “We are gestating a large condo market…where there are a lot of young people who start renting and then want to stay.”
Rockrose is in the midst of developing four buildings in Court Square totaling 2,200 units. “The final building of the four may be [a small] condo,” Elghanayan said. He said that developers tend not to build condos until an area has matured and taken shape.
However, many renters are moving out of Long Island City despite their love of the area.
Eric Benaim, founder of Modern Spaces and another panelist at the LIC Summit, said a big factor for their departure is the lack of 3 bedroom apartments in the neighborhood. He said that in most buildings about 30% are 2 bedrooms, with the remainder typically studios and 1 bedrooms.
“There is demand for—yet lack of–3 bedrooms in the neighborhood…and families are moving out to the suburbs since they can’t find any large apartments,” Benaim said.
Kevin Singleton, executive vice president at TF Cornerstone and panelist, said the neighborhood has more families than the company ever anticipated.
He said that when the company developed 45-45 Center Boulevard it constructed a children’s playground catering to the needs of 45 children. “Now we have a waiting list to use it…so there are a lot of children and strollers,” Singleton said.
The demand from families was also evident at TF Cornerstone’s 184 condo development The View. “We found a diverse population, lots of families, lots of strollers,” Singleton said. “We didn’t anticipate the need for stroller parking originally, but now we have that need.”
TF Cornerstone’s most recent building, however, 46-10 Center Boulevard, caters mainly to single urban professionals. The majority of units are studio apartments, Singleton said.
Elghanayan said that he was not concerned by claims that there is a lack of retail in the area. He said that stores will continue to open in the area as the population increases. Currently, developers are providing incentives for retailers to come to the area.
Nevertheless, Long Island City is not a place where the dollar goes far.
Benaim, speaking in general terms, said that rents on the waterfront tend to go for between $55 to $60 per square foot; Court Square about $50 per to $55 per square foot; and Queens Plaza in the high $40s.
Condos are selling on average for about $1,000 per square foot, Benaim said.