New York’s Long Island (or “Lawn Guy Land” if you’re a local) is famous for buttered Kaiser rolls, an abundance of beaches, the piano man Billy Joel, and of course, soirees in in the Hampton’s where the median house selling price is so high, that if you have to ask if you can afford it, rest assured that you can’t. And now, there is another item for the Long Island identity and legacy that few business pundits saw coming: Amazon is on the way.
While the full battalion of Amazon workers won’t set up camp in a 50-story office tower in Long Island City (currently occupied by Citigroup) until 2020, Bezos and friends’ decision to head to the land that gave us iced tea for grown-ups has already started changing the dynamics of both Long Island’s and New York City’s real estate market. Here is some of what we can expect to unfold in 2019:
- 1. Demand for condos in Long Island City will continue to far outstrip supply, which is good news for developers who have a shovel in the ground. Expect to see plenty of construction site signs.
- 2. Renters will continue bracing for impact. If Amazon fulfills its ambitious migration plans, then rents will skyrocket. On the other hand, if things slow down, then costs might not blast into the stratosphere.
- 3. Neighboring areas like Astoria, Woodside and Sunnyside Yard are likely to find themselves with an influx of Amazon folks (and all of their supply chain relatives), who cannot find an affordable spot in Long Island City.
- 4. When the moving trucks have finished unpacking, Amazon expects to create a staggering 25,000 jobs. This could bring tears of joy to landlords in Queens, but cause some distress for those in Manhattan who lose tenants.
- 5. Commercial lease costs are certainly going to rise — it’s just a matter of how much and how fast. While some of the area’s big players are going to be fine (e.g. JetBlue, Silvercup Studios, etc.), it’s going to be much tighter for some SMBs that may be forced to shutter and relocate.
The Bottom Line
Nobody — not even Bezos — has a crystal ball to see how much Amazon will shift the Long Island landscape; both physically and figuratively. However, one thing is for sure: profound change is coming, and as is often the case, the residential and commercial real estate market is going to be the bellwether that reveals if the area won the biggest business contest of all time — or perhaps lost it.