As I've pointed out in previous posts, I like to show the drastic difference in property values throughout NYC. Sometimes these variations can happen only a few blocks apart. Without question, 10-15 miles in any direction makes an enormous difference. I doubt you would ever see this drastic of an effect in any otherUScity.
In the case of Long Island City (LIC), land values are only about 6% of what a prime downtownManhattan development site sells for. These neighborhoods are only 12 miles apart or a 23 minute drive (in little or no traffic, which I question why Mapquest even bothers citing).
Our office recently sold a vacant lot at29-37 41st Avenue, located on the northeast corner of41st AvenueandQueensPlazain LIC. It sold for $8,300,000 or about $40/BSF.
The lot has a footprint of 17,086 SF. It is zoned M1-6/R10 with an F.A.R. of 12.0, allowing approximately 205,032 BSF for commercial, residential, or mixed-use development. The land is ideally situated within close proximity to the new Jetblue headquarters in the Metlife building, as well as the newly builtGothamCenter, affording the buyer a wide range of development options.
“The site was purchased by a localQueensdeveloper,” said Massey Knakal First Vice President of Sales, Al Holloman, who exclusively handled this transaction. “Demand for vacant land inQueensPlazais at an all time high as the inventory for vacant land in the plaza is minimal,” he added.
The 7 train will get you from this site to Midtown Manhattan in under 30 minutes.
Developer Steve Cheung, President of Elmhurst-based E Home Real Estate, purchased the site. It was previously planned for a Starwood Aloft Hotel.
According to the Real Deal, Stephen Cheung said the project will take about three years and $60 million to complete. He is planning to build condos, which now sellout around $600/SF.
In comparison, I have seen bidding for prime development downtownManhattansites reach over $650/BSF. Condos in these areas can sell for over $3,000/SF and will blend in the $2,000s.
So which development proposition has a larger spread? Assuming it costs $400/SF all in to build in LIC and $600/SF for luxury residential product inManhattan, LIC has a spread of about $150/SF, whereas downtownManhattan has a spread of over $750/SF.
That being said, financing a development site at a purchase price anywhere near $650/BSF can be a challenge. It would certainly take more equity to do so, which can greatly effect returns.
In all, there is little inventory in both neighborhoods. TriBeCa has 55 new condo listings ranging from $735,000 to $6,265,000, whereas LIC has 124 new condo listings at a median price of $659,500. There seems to be an opportunity in both areas.