LONG ISLAND CITY — The new Cornell Tech campus on Roosevelt Island will spur a wave of commercial development in Long Island City — with the neighborhood's former industrial sites attracting startups wooed by cheaper, hipper and less conventional office space, experts say.
Last week, officials celebrated the opening of the first phase of the $2 billion tech campus, which is expected to generate thousands of jobs over the next three decades and raise the city's profile as a hub for technology companies.
Some of that impact will undoubtedly spill across the river into Long Island City just one subway or new ferry stop away, according to experts, who predict the campus will help raise the neighborhood's profile as a commercial destination, after being dominated by residential construction over the past several years.
Long Island City office rents cost around half of what they go for in Midtown Manhattan, and the area's building stock includes a number of formerly industrial sites favored by startup companies looking for less expensive and non-traditional office settings, real estate experts said.
"Court Square has a lot of these manufacturing buildings and warehouses that’s very appealing to these types of tenants — tech companies that don’t really want to be in Midtown high-rises," said Paul Januszewski, vice president of planning at Rockrose, which owns several residential and retail buildings in the neighborhood.
"It's been difficult attracting new commercial development to Long Island City, but I think that’s at a tipping point now where a lot of that is starting, and I think Cornell will help that along," he added.
The new buildings at the Cornell Tech campus on Roosevelt Island (Credit: DNAInfo/Amy Zimmer)
Nearly two decades ago, city planners anticipated Long Island City would become a major office district, rezoning a large swath of the neighborhood in 2001 to facilitate more commercial construction.
While the neighborhood did see new office projects, with buildings like 2 Gotham Center joining the skyline-dominating Citigroup building, commercial development has been greatly outpaced by residential construction — with nearly 13,000 apartments having opened in Long Island City since 2006 and another 20,000 in the pipeline, according to advocacy group LIC Partnership.
"I think it has to do with a variety of issues; not an insignificant one was the Great Recession, which really took the wind out of a lot of sails and made it even harder to finance a commercial project," said the group's president, Elizabeth Lusskin. "It just tilted more toward residential."
But the tide is starting to turn, she and other experts said, as new commercial projects have emerged, including developer Tishman Speyer's forthcoming 1.1-million-square-foot office hub at Queens Plaza South that will feature two 27-story towers.
Other companies have chosen to convert former warehouse buildings into creative office complexes, including The Apple Building, The Falchi Building and The Factory, which offer perks for tenants like food hall vendors and fitness centers.
The new tech school is going to create even more demand for these kind of projects, experts said.
"I think that the Cornell Tech campus is going to be a gateway to introduce more people to Long Island City," said Joe Grotto, an executive director with Cushman and Wakefield. "Developers see the trends and really try to be ahead of the wave in the trends."
The Factory, a former industrial building at 30-30 47th Ave. that's been converted into offices. (Credit: DNAinfo/Jeanmarie Evelly)
Dan Wechsler, director of investment sales at brokerage firm Ariel Property Advisers, predicts the neighborhood may see more office development spring up along 21st Street, since it has an F train station just one stop away from the Roosevelt Island campus.
"A majority of the area that surrounds that F train stop in Queensbridge is commercially zoned. You have a lot of older, industrial buildings along 21st Street that a lot of investors would love to get their hands on," he explained. "I think those buildings lend themselves to exactly that type of [development.]"
For new tech companies affiliated with Cornell Tech — which has spurred 38 start-ups already, officials said Wednesday — Long Island City offers cheaper office space than the other side of the river in Manhattan.
Wechsler estimates that average office rents in Midtown range between $60 and $80 per square foot, compared to an average of $35 to $40 per square foot in Long Island City, a bargain that will appeal to cash-strapped startups.
"Certainly it makes sense if you’re a startup to go east into Long Island City, as opposed to into Manhattan," he said.
Lusskin said transportation is an obvious attractor for both developers and companies looking for office space. Long Island City offers access to a number of subway lines and a quicker ride than Manhattan to the city's two major airports. Additionally, it's now just an eight-minute boat ride from Roosevelt Island thanks to the new Astoria ferry route that launched last month.
"I think that the impact of the ferry can't be underestimated in terms of driving spinoff development," she said, adding she expects Cornell Tech students and staff to not only work in Long Island City, but to live, dine and shop in the neighborhood, as well.
"It will be really an extension, I think, of the campus," she said.