Brokerages waiting for critical mass in LIC
Feb. 13, 2008
Some of Manhattan's largest real estate brokerages are muscling in on Queens brokers' turf to market new developments going up in Long Island City.
But with the exception of one firm joining the handful of local mom-and-pop shops, most are not yet opening up offices there, in part because of a lack of non-new development housing.
Manhattan-based Prudential Douglas Elliman, which is actively considering a new office in the neighborhood, has become one of the biggest players in the Queens market, with offices in Flushing and Bayside.
Elliman is the exclusive agent for the Powerhouse, which is scheduled for a July 2008 opening. The converted Pennsylvania Railroad power station will feature 177 loft-inspired units ranging from 600-square-foot studios to 1,700-square-foot three-bedroom units. Prices will start at $450,000.
"Long Island City and Queens in general represent one of the best opportunities for somebody to get in on the ground floor," said Andrew Gerringer, managing director of the development marketing group at Elliman.
Elliman is representing another new development called the Foundry at Hunters Point, a four-story condominium with 57 units, ranging from studios to three-bedroom apartments, with prices expected to start in the low $400,000 range.
Gerringer warns that no decision will be made before 2008, as full-service locations will make sense after the neighborhood has established a resale market. For that to occur, a critical mass of existing homeowners is needed.
Still, major brokerage houses are betting that a new wave of condominium projects will turn this industrial transit point into one of the city's most dynamic residential neighborhoods, luring first-time homebuyers with short commuting times to Manhattan and relatively low entry prices.
Led by the $2.8 billion Queens West redevelopment project at Hunters Point, Long Island City will have about 25,000 units when all of the current developments are completed, according to Andrew Ebenstein, operations manager at the Long Island City Business Improvement District.
"Clearly, the waterfront district has tremendous potential," added David von Sprekelsen, vice president at Toll Brothers, the developer of the Fifth Street Lofts, a 118-unit condominium project on 48th Avenue and Vernon Boulevard in Long Island City.
Nest Seekers International, a Manhattan-based boutique agency, says it was the first Manhattan-based brokerage to open up a full-service location in Long Island City, a few months ago. The firm specializes in finding up-and-coming neighborhoods for its clients, and says it was also the first Manhattan firm to open up an office in Brooklyn's Dumbo section.
"This is a very exciting, transitional neighborhood," said David Grossman, vice president and managing director at the agency. "When you have an emerging market, there has to be a great deal of time spent with interested buyers in the neighborhood itself. What's important is to help people seek the future here."
Halstead Property is the exclusive agent for Fifth Street Lofts, which is more than 75 percent sold. There are about 25 units remaining, with asking prices ranging from $433,000 for studios to $1.49 million for three-bedroom units.
Manhattan-based Corcoran Group represents a number of new condominium projects in Long Island City and Astoria, including the Arris Lofts, which is represented by the Corcoran Sunshine Marketing Group. The 237-unit converted printing plant has sold most of its units, with prices ranging from $105,000 for studios to $2.9 million for a four-bedroom unit.
However, Corcoran president Pamela Liebman said there are no current plans to open up a new office in Queens.
The flood of new developments in Long Island City appears to be skewing the market. According to a report from Radar Logic, while Queens residential sales prices fell 5.2 percent to $460,000 in the fourth quarter, down from $485,000 in the prior year quarter, a large number of high-end condo closings in Long Island City pushed condo prices higher, as the median sales price increased 14.6 percent to $275,000, the report said.
Prior to zoning changes in Long Island City, local real estate sales were dominated by small family-owned firms that concentrated on Astoria, Sunnyside and other residential communities.
"The market here [in LIC] is not established in the way that there are units changing hands from an individual to another individual," said Ebenstein. "It is really developers unloading inventory."
The influx of Manhattan realtors will help fill many of these new developments, which are aimed at young professionals who cannot afford to live in Manhattan.
These brokers have vast databases of potential customers, and their brand names carry substantial weight across the city.
However, local brokers counter that consumers will ultimately make buying decisions based on the quality of the property they are viewing, no matter what the broker's brand name.
"The customer who goes to purchase something is not impressed by what realtor he uses," said Ted Kouris, owner of Metropolis International Realty in Astoria. "He's looking at the product he's getting."
Charles Sciberras, a veteran salesman at REMAX Today, also based in Astoria, said that Manhattan brokers can't provide the same level of local contacts and expertise about Long Island City and Astoria.
He questioned whether the big brokers will remain committed to the neighborhood if the local market is hurt by the mortgage crisis.
"I've been doing this since the time when you couldn't give properties away here," he said. "These guys doing all of these new condo projects are going to be sitting there with their fingers up their tuchus," he said.