BY MICHAEL STAHL
The media has begun to give the borough of Queens its due as a real estate powerhouse.
For years pundits predicted Queens would emerge as the “next big thing” in real estate, and, as sales prices reach all-time highs – even in neighborhoods not named Long Island City – the experts are finally being proven right. Groundbreakings for new developments are virtually a daily occurrence, and some of the City’s most anticipated transformative projects – Flushing Commons and Astoria Cove, for example – are in the works within Queens’ borders. Half of the neighborhoods that made StreetEasy’s “hot” list for 2016 are in Queens and the New York Department of State recently revealed that the number of real estate brokers in Queens rose 6 percent last year – more than double the rate in Manhattan. However, the majority of such publicity revolves around the great residential real estate growth of the past handful of years. Matt Fotis, 35, a broker at Marcus & Millichap with more than a decade of experience in commercial real estate transactions, says Queens is “the place to be in 2016” for those eager to invest in commercial property as well.
“It’s a huge opportunity,” he says of the prospects for potential investors in Queens. “It [presents] the best opportunity in the whole city right now.”
Fotis, who heads a team of 12 agents, each specializing in commercial real estate deals in various sectors throughout the city, points out that Queens is comprised of a number of long-established residential neighborhoods, which “lays the ground work” for new businesses to find storefronts attractive there. He adds that “an ideal setting” for a sound commercial investment consists of “close proximity to Manhattan, close proximity to a subway, area amenities, nature thoroughfares, and good culture.” Somewhat ironically, already-established businesses in an area contribute to the firmness of a commercial investment as opposed to counting as a strike against one – in other words, pre-existing foot traffic doesn’t hurt. Clearly, much of Queens has all of these features in undeniable mass quantities, which explains the spike in interest, prices and competition Fotis has seen in the borough over the last two years especially.
The state of an area’s development also determines the type of building an investor should consider. “The first businesses to enter [burgeoning] markets are food services – cafes, bars and restaurants,” Fotis observes, “and then you get shops selling trendy clothing.”
Fotis names these 5 neighborhoods as the most outstanding for making commercial real estate investments this coming year in Queens:
1. Ridgewood – “The area has really changed because of the spillover from Bushwick and the access to L train,” Fotis says. “It’s experienced a big growth in rent and there are a lot of new businesses opening there right now.” Last April, four properties on Myrtle Avenue were sold – a bustling commercial stretch of street. The buildings sold at $411.59 per square foot, among the high-end of his recent sales.”
2. Sunnyside – “It’s the next stop out [on the 7 train] from Long Island City and Astoria,” Fotis says. “So, it’s got a close proximity to Manhattan, and it’s got a lot of nice multi-family [homes] in the neighborhood. It’s really poised to take off.” John Ciafone is planning on putting up a mixed-use development on the sites where P.J. Horgan’s and Center Cinemas once thrived on Queens Boulevard, while Phipps Houses hopes to erect a sizable residential building on Barnett Avenue, adding more shoppers to the area.
3. Jackson Heights – The neighborhood is “similar to Sunnyside,” says Fotis. “It hasn’t experienced as much change over the last couple of years and it’s a little further [away from Manhattan] but, again, it’s the next stop out.” Thirteen months ago, Fotis personally brokered a deal for properties on 75th Street and Broadway. They sold for a neighborhood record $736.78 per square foot, in part, according to Fotis, because the buyer observed an influx of new renters in the area. “There are a lot of housing options there and new developments going up nearby,” he adds.
4. Woodside – Not one but two 10-unit, seven-story mixed use developments, each measuring more than 10,000 square feet, are in the planning stages at adjacent lots on 65th Street and Roosevelt Avenue. Nearby, noted architect Raymond Chan is designing a Holiday Inn Express for the Century Development Group on 64th Street and Queens Boulevard. These developments certainly support Fotis’ inclusion of Woodside here.
5. Corona – A gaggle of more modestly sized residential developments have had permits filed in Corona since the fall, which in turn increases the chances of success for emerging businesses.
Interestingly, two particular Western Queens enclaves that have gotten used to showing up on real estate best-of lists did not make an appearance on this one.
“Long Island City and Astoria are really solid,” Fotis says, “and they’re going to continue to grow, but the real opportunities with a greater upside are found elsewhere. Investors want to get in before neighborhoods ‘arrive.’”
Fotis is quick to offer more advice for those interested in jumping into the Queens commercial market: “Make sure you have the right expectations regarding the timeline of your business plan. Real estate is typically a long-term play and I see people who hold on to their assets the longest benefit the most from resales. You might need to make changes to the building to attract new tenants, so make sure you have staying power because it’s not a matter of if [you’ll get a return on your investment], it’s when.”
For more information on opportunities in commercial real estate, contact Matt Fotis at 212-430-5234.