■REAL ESTATE Winter Forecast: Hot, Hot Office Market Minutes after I sat down to write this column about the local office market an email with an article from the Wall Street Journal titled “Long Island City is the Latest Hot Spot for Office Real Estate” came in from one of my colleagues. The folks at the Journal have beaten me to announce the fast-approaching culmination of what has been brewing for the past 12 months. It used to take years for this sort of thing to take happen, but in just a matter by david dynak of months the office rents in western Queens have gone up by 30 to 45 percent, from $17 to $21 per square foot (psf) to as much as $27 to $35 psf in the same properties. Back in April we wrote about a shocking 50 percent sale price increase in 12 1/2 months on 47-25 34th St., with “asking rents ranging from $13 to $19 per square foot” being a bargain compared to Manhattan. Fast forward to December and suddenly David Dynak is a real estate broker at First Pioneer Properties and an LIC resident. He’s lived in Western Queens since 1993. not only are rents at buildings like the Silks Building (37-24 24 St.) at $30 psf and home to e-commerce companies ranked in the top 20 fastest growing retail and New York companies by Inc. magazine, but also completely out of business of leasing to any light manufacturing, food preparation or storage, rehearsal/performance or training, high traffic or anything requiring water or gas. A landlord on 11th Street near Court Square sent me a note that if I ask him today, his rent is $23 psf (it was $17 a year ago), but after the New Year it will likely be higher. But the suite in question is not available until February and he has already received some offers! This accelerated raise in office and loft space rent prices, mostly driven by Manhattan office rents nearing all-time highs, has now caught attention of big-money investors and institutional buyers. According to the WSJ, Vornado Realty Trust, one of the country’s largest real estate holding companies, has just acquired the Center Building on Northern Boulevard and Honeywell Avenue for a price 70 percent higher than what its previous owners paid two years ago. Earlier this summer, down the block, at Steinway Street and Northern Boulevard, the Standard Motor Products Building was purchased for three times the amount previous owners paid six years ago. Ironically, it now seems our earlier idea of attracting tenants from Manhattan’s “Midtown South,” with promise of quick commute via the No. 7 train, needs to happen much faster before rents become restrictive for garment and showroom tenants. Many warehouses currently occupied by tenants who signed five-year leases during the recession between 2009 and 2011 and paying rents of $12 to $15 psf slated to now ask rents in the low to mid $20s psf, just as their leases expire. Loft/office-occupying businesses being not only asked to jump from $18 psf to high $20s psf,l but also perhaps not allowed to stay at all due to their quasi-industrial use. We’re entering a new round of musical chairs. Tenants in Manhattan are facing similar challenges but at a different rent scale and have no choice but to look into the boroughs, including Queens, or New Jersey. Yet certain businesses simply can never afford rents we may ask them to pay. It’s a serious challenge because as much as turning industrial space into office and retail is a natural progression of gentrification, and residential development brings even more people into the area, there will always be the need for affordable warehouse space. If you want your donut freshly baked and your shirt pressed for $2.50, we better find them a place they can afford close enough to deliver daily. ABSOLUTE CLEANERS SERVICING ALL L.I.C. BUILDINGS WITH OUR FREE NO HASSLE VALET PICK UP & DELIVERY RIGHT TO YOUR RESIDENCE • Custom Dry Cleaning • Shirt Laundering • Tailoring & Alterations • Leather & Suede • Wash & Fold Service • Drapery Cleaning • Houldhold Items • Free Box Storage www.absolutecleaners.net 4-71 48th Ave. • 7 18.392.3139
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