Amazon has revealed its plan to develop a second headquarters along the East River banks of Long Island City, Queens. The “HQ2” corporate complex will span multiple lots and structures on Vernon Boulevard, from 44th Road, all the way to 46th Avenue.

The HQ2 development arrives as a joint venture between several state agencies and private entities. Government agencies include Empire State Development, the NYC Economic Development Corporation, and the City of New York. TF Cornerstone was selected as the development company that will oversee the entire project and coordinate all parties.

The new headquarters will initially occupy approximately 4,000,000 square feet of commercial space, and promises the creation of 25,000 jobs within 10 years. The company’s total footprint will eventually occupy 6,000,000 to 8,000,000 square feet of commercial area. Within 15 years, the company is expected to create up to 40,000 new jobs.

The average wage for the Amazon HQ2 employee population will exceed $150,000 per year.

In addition to offices, the site will include affordable manufacturing and industrial space, dance studios and cultural space featuring programming by the Joyce Theater, and community development centers.

All signs point to real estate prices going up. In Seattle, Amazon “makes up a disproportionate share of the city’s growth,” according to the Seattle Times, and is one of the driving forces behind the city’s rapid population growth—and its rising housing costs, which have doubled since 2012.

Long Island City is already the priciest neighborhood in Queens: the median rent in the borough’s northwestern section, which includes LIC, is already just under $3,000/month (according to Miller Samuel); and without any tangible Amazon-effect present in the market yet.

Growth in Queens home values have outpaced those in Brooklyn and Manhattan since mid-2017, and have already risen 5 percent over last year even though sales are generally slowing NYC wide at the moment. Amazon’s announcement will likely draw the attention of speculators looking to capitalize on the transformation of the area and dwellers who will look forward to an improved and more amenity rich neighborhood. It will be interesting to see how prices are affected in the short and medium term. My guess is that after the initial excitement (say 3 or 4 months) we will not see a significant impact on sales prices for the next year or so because investors looking to buy condo units will negotiate their deals knowing that Amazon’s employees are not going to be living in the neighborhood before two or three years from now (at least) and in the meantime they will be facing strong competition from rentals projects nearby when the current demand is not quite there yet to keep up with the new offer brought on the market. And the same goes for final users who want to see more tangible improvements in a neighborhood before pricing that factor into their offers. This, of course, will be a different story when Amanzon’s HQ2 will be actually up and running. I think there will be plenty of good buy opportunities in the next eighteen months. Just wait until the initial buzz wears off..and then call Rava Realty ;)  (sources: New York YIMBY, Curbed)

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