The buzz over rising real estate values is no longer confined to trendy parts of Brooklyn. A new report says that industrial property values in Queens have risen by nearly 60 percent since last year, fueled mostly by an influx of new residential development opportunities.
“Prices have gone through the roof,” said Swain Weiner, a president and partner at real estate company Greiner-Maltz.
Commenting on the report by commercial real estate and investment firm Jones Lang LaSalle, Weiner said that although he wasn’t quite sure if industrial property values had gone up across the borough uniformly, he said that prices had gone up considerably or “nearly doubled” in Astoria and Long Island City. Weiner attributes much of the rising property values and corresponding rents to a surge in development opportunities in the borough.
“What’s happened is that some longtime factory owners, such as auto repair shops or craftsman-related businesses have decided to take the money now and leave,” Weiner said.
He explained that Queens property has become more attractive now, in part because Manhattan is so expensive.
“Especially now, Queens is an affordable alternative to NYC,” Weiner noted.
Reid Berch, senior vice president of JLL’s Industrial Services Group, said in the report that rents would continue to rise.
“The shrinking supply of inventory in Queens, combined with a thriving logistics sector, has industrial rents set to grow steadily into 2015,” Berch said.
And although Queens has traditionally been home to all types of manufacturing businesses, Weiner said that recent zoning changes have also helped to stoke investor appetites.
“In both Long Island City and Astoria, land has been rezoned for residential use and this has created development opportunities for new condos and rental buildings,” Weiner said.
Crain’s New York recently reported that more than 6,100 rental apartments have been built in Long Island City in the last eight years.
“There is only so much space that is available, even in Queens, and that has created high demand for industrial sites that remain,” Weiner added, noting that neighborhoods such as LIC and Astoria also boast convenient commutes to Manhattan.
Weiner also said that while many LIC and Astoria industrial sites are being lost to development, others are relocating to places such as Maspeth, Flushing and Jamaica, where rents are also starting to rise as manufacturers seek out lower-cost industrial and manufacturing locations.
“Jamaica area rents have gone up about 25 percent also in the past year,” he said.
Additionally, the JLL report noted that rents in Queens warehouse and distribution properties rose 1.3 percent to $13.31 per square foot between the second and third quarters of the year, while manufacturing property rents climbed 6.3 percent during the same period to $13.02 per square foot.
By Alan Krawitz