By Josh Barbanel
Even before Amazon.com Inc. decided to put a headquarters in
Long Island City, the retail giant's interest in the Queens
neighborhood unleashed a condo gold rush.
Amazon's interest was made known scarcely a week ago, yet
brokers say they are already selling units -- sometimes
sight-unseen -- via text message. Others are renting vans and
packing them full of clients eager to view multiple buildings, or
holding group tours in Chinese.
Now, with Amazon's commitment to the New York City neighborhood,
brokers are predicting the apartment market there will surge
further.
"This is like a gift from the gods for the Long Island City
condo market, " said Patrick W. Smith, a Stribling agent in the
area.
Long Island City and Northern Virginia were selected to be the
homes for Amazon's second and third headquarters, according to
people familiar with the matter. Each of the regions could house
some 25,000 employees. The decision was disclosed Monday evening
and confirmed by Amazon on Tuesday.
Up until last week, the Long Island City market had suffered
from slowing sales and rising inventory. Now, some brokers say the
sudden mood shift reminds them of the heady days of New York City's
condo boom just before the housing market crashed during the 2008
financial crisis. "This is the first time in my 20-year career that
I have seen the market go from a buyer's market to a seller's
market overnight, based on a rumor," Mr. Smith said.
During the first six days since Amazon's interest in Long Island
City became public, searches on the listing site StreetEasy.com for
residential property in the neighborhood surged 295% from the same
period a week earlier, StreetEasy said. The biggest spike occurred
in the first few days after the news, when search volume jumped
more than 400%, StreetEasy said.
Real estate broker Teresa Ali faced a frenzy at the sales office
for the Galerie, a new brick and glass building going up on Jackson
Avenue. Though the building, which wraps around a central garden,
won't open until spring, Ms. Ali said her team met with nearly 100
buyers on Saturday and Sunday. More than 60 other buyers were
turned away after leaving their names.
The same building logged 34 visits from potential buyers for the
entire previous week, she added. "Multiple offers were on the
table" after Sunday's open house, while four more offers came in
overnight.
"It was bedlam," Ms. Ali, a sales manager at Halstead Property
Development Marketing, said. Her team ran simultaneous group tours
in English and Mandarin over the weekend.
Speculative investors and buyers who plan to live in the
neighborhood are betting on the promise that an Amazon headquarters
would bring new amenities and stature to a once dilapidated
industrial neighborhood, pushing up prices in the future.
"Buyers are hoping it will become the next Silicon Valley and
want to be in on that," said Kayla Lee, a broker at Modern Spaces
who oversees sales at Corte, an eight-story condominium with an
angular glass facade that went on the market in August.
The past week was the building's best ever, with deals on six of
its 84 units and several more under negotiations, she said. There
were 20 appointments last weekend, compared with four the week
before.
Even before the Amazon decision, Ms. Lee said, prices were
scheduled to go up.
"Clients I hadn't spoken to in seven or eight years started
texting me," said Eric Benaim, the president and founder of Modern
Spaces. "I sold 20 apartments via text."
He said his firm's agents, who represent many new condo
developers, were now meeting with these clients to work through the
paperwork.
Brokers say there are about 350 new condominiums on the market
in Long Island City and about 50 resale apartments. Some of these
resale units had lingered on the market for weeks without
attracting any interest but are now in demand, too, said Mr.
Smith.
On Friday, he found that weekend appointments at many condo
sales offices were filled. So on Saturday, he took five clients on
a tour -- on foot and by Uber -- of open houses. And on Sunday, Mr.
Smith rented two dark blue minivans with drivers, and he and an
associate each rode shotgun while showing properties to groups of
five buyers.
Other clients met them along the way, he said, so by the end of
the day they had chaperoned at least 15 clients.
"The showroom was jam-packed and only grew," Mr. Smith said,
adding that other clients crowded into the dedicated conference
room originally reserved for his group.
Mr. Smith, who lives in Long Island City, warned his buyers that
the Amazon deal wasn't done and might fall through.
Still, he said, "The worst case for the Amazon buyers is that
they own real estate in Long Island City -- not a bad proposition,
they tell me."
Write to Josh Barbanel at josh.barbanel@wsj.com
(END) Dow Jones Newswires
November 13, 2018 12:07 ET (17:07 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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