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East River's 'Psychological' Barrier Not Deterring Renters from LIC

By Amy Zimmer | August 28, 2017 7:05am | Updated on August 28, 2017 9:25am
 A rendering of a the
A rendering of a the "sky terrace" at the Forge in Long Island City.
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The Forge

QUEENS — Long Islander Jarrett Malizio always wanted to live in Manhattan — or “the City” as he and some New Yorkers call it.

But while he and his fiancée toured open houses in East Midtown, Hell’s Kitchen and the Lower East Side, she convinced him to also look in Long Island City.

They ended up settling on LIC, moving in April to a 725-square-foot one-bedroom in a five-year-old building near the waterfront for around $3,330 a month, said Malizio, 28.

“If I was single, I might not want to live there. You’re not in the center of the universe,” he conceded. “But I didn’t realize until I got here that it was such a large, up-and-coming community for people just starting their lives with someone or starting a family.”

When it comes to “location, location, location,”  traditional boundaries no longer apply for renters looking to move into new, amenity-packed buildings sprouting across the city, especially as transit options have changed. The subway system is sputtering, ferry service is increasing, Citi Bike is expanding and Uber or Lyft are at the ready. 

Developers in areas such as Murray Hill and Kips Bay, for instance, must now contend with their lower-priced neighbors across the East River in Long Island City. For the first time ever, most would-be renters are looking at both neighborhoods, said Karla Saladino, of Mirador Real Estate, the exclusive agent of several buildings in the Midtown East area.

“If you’re on First Avenue showing a unit, people are literally looking out the window at Long Island City, and saying, ‘Oh, it’s that close?’” Saladino said.

In addition to the 10-minute subway ride from Long Island City to Midtown, the ferry takes a few minutes to cross the East River. Another Long Island City ferry stop is in the works, and Citi Bike is rolling out more stations, making it an easy ride over the Queensboro Bridge.

When it comes to prices of new developments between the two areas, Long Island City goes for significantly less, especially for larger apartments.

Two-bedrooms were a whopping 85 percent less, averaging $4,482 a month in Long Island City compared to $8,315 a month in Midtown East, according to an analysis by Nestio, a real estate tech firm that provides a database for rentals for landlords and brokers to track apartment openings, concessions and other information.

The price for a one-bedroom in Long Island City averaged $3,395 a month, 44 percent less than Midtown East’s $4,890 a month, while studios averaged 38 percent less, at $2,958 a month in Long Island City compared to $3,575 a month in Midtown East.

The new developments in the two areas have followed slightly different tracks when it comes to amenities, Nestio found.

New buildings in Midtown East tend to offer what’s considered more traditional amenities like doormen and valets, as at the American Copper Buildings, a new 761-unit luxury rental on First Avenue and 35th Street with a dramatic skybridge featuring a 75-foot-long pool connecting its two towers.

Meanwhile, Long Island City buildings have more “new wave” offerings like bike storage, barbecue grills and common kitchen areas. Many developments are trying to tap into the area’s young and artsy vibe, like The Forge, a 272-unit building at 44-28 Purves St. that features works from local artists, a “hammock park,” and an area with foosball and ping pong.

Saladino has been advising new owners of older Murray Hill buildings to do simple upgrades and renovations rather than "top-of-the-line" facelifts so they can keep rents lower and compete more with new development in areas like Long Island City.

“There’s almost too much choice in super high-end,” said Saladino, who has been advising landlords against fancy renovations. “Maybe we shouldn’t glam up every unit. Keep Murray Hill Murray Hill-ish. It used to be the place you could afford when you couldn’t afford Chelsea. Now it’s like Chelsea.”

She understood the appeal of Queens, noting that more families were looking there because they might be able to get a two-bedroom with a washer and dryer for a lot less than Manhattan, even if it feels less established in terms of shops and restaurants.

“There’s going to be a lot of new stuff happening in Long Island City,” noted Carole Bloom, of Bloomstone Group, which is marketing the 168-unit Watermark LIC, an energy-efficient, non-smoking building with a rooftop gym, a Zen-like garden and coffee bar lounge, among other amenities.

Around the corner from the building, a Starbucks is opening next to a Chipotle, and Watermark is getting some new retail in its space, too, she said.

“It’s soon to be vibrant,” she said, “but not too vibrant that you won’t want to come home to it, like other neighborhoods that get too touristy. It will remain residential and won’t be bogged down with tons of people.”

Bloom, too, has noticed house hunters traveling around, carrying brochures from other new properties from the East Side, as well as the Far West Side and Downtown Brooklyn.

But as so many new buildings compete not only with others in their own zip code, but also with those in other boroughs — unleashing a torrent of incentives like a free month’s rent — a wave of vacancies is expected.

A report from online real estate firm Ten-X predicted vacancy rates will surge from 3.8 percent to more than 11 percent by the end of next year, while real estate data firm Reis believes it will rise to about 6.1 percent, according to the Wall Street Journal.

David Brause, of Brause Realty — whose firm worked with the Gotham Organization on The Forge — has also noticed how Long Island City is now on the radar of more renters these days. 

With Cornell Tech opening opening on Roosevelt Island in September, professors and graduate students would likely look one stop away on the F train in Long Island City rather than in Manhattan, he thought.

“In London and Paris, there’s no great difference from being on one side of the Thames or Seine than the other,” said Brause, who is chair of the board of the Long Island City Business Improvement District. "But for some reason, there’s a big psychological difference from being on one side of the East River to the other. You’re still in New York.”