NEW YORK, NY – May 24, 2018
By Louis Peter Cotrone, ONE Commercial Realty Services
There was a time, not too long ago, Jamaica was perceived by New Yorkers as the transportation hub that nobody wanted to be for too long, fearful of catching whatever it was they deemed was in the air. Jamaica’s track record stretches far beyond the metal railing: a crack cocaine epidemic in the 1980s, followed by a 20-year period of economic stagnation and complacency for commerce and development had spooked even the most adventurous developers and investors in Real Estate. Fast forward to 2007, Mayor Bloomberg and the City teamed up to initiate the Jamaica Rezoning Initiative. The plan, which covered 368 blocks, was the single largest rezoning of the Bloomberg administration, and one of the largest in the history of New York City. It paved way for 3 million square feet of commercial space, 9,500 jobs and 5,200 residential units, including 780 subsidized units.
As the tenth anniversary of this initiative just passed, Jamaica sits on the short list of sub-market pockets of NYC primed for urbanization and gentrification. Like a child experiencing their first signs of maturation, Jamaica is finally beginning to develop in places they never envisioned possible. From an investors perspective, Jamaica is a geographic diamond in the rough, sitting at the crossroads of everything in New York. Twenty minutes in every direction to Manhattan, Nassau County-Long Island, the Beach, any main sporting arena in Queens, JFK Airport and once the Air Train is completed, LaGuardia Airport. The evidence supports this notion as hotel permits fly into the DOB, anticipating a vision of an influx in tourists, travelers, and New Yorkers. In an age where boutique hotels are dominating the marketplace, areas like Brooklyn and Queens are seeing an influx of tourists. From a consumer perspective, it makes sense. As a tourist visiting New York City, why pay $1,000 a night to stay in Manhattan when you can stay in a brand-new hotel in Jamaica for half the price and be in the heart of Manhattan or a beach on Long Island in 20 minutes.
The catalyst for this gentrified influx of developers, investors and economic growth rests on the chiseled shoulders of the MTA & LIRR, along with the minty renovated Air Train with service to JFK. Governor Cuomo has initiated a $65 million infrastructure facelift, consisting of new platforms and tracks, glass-enclosed heated waiting areas, and Wi-Fi & USB charging stations. No longer are the days where Jamaica’s Hub instills fear and anxiety in the hearts of commuters as they wonder each day if they will get to work on time. Instead, when the 200,000 daily passengers make their stop at one of the largest transportation hubs in the United States, they will be greeted by sleek imposing metal framework and façade glass. The transformation will be supported as part of the Jamaica Capacity Improvements Initiative, which commenced in 2010 with an anticipated investment of $442 million by the conclusion of 2019, according to Cuomo’s office.
The implications of the transportation initiative set forth by New York City stretch far beyond the walls of Jamaica Station. Jamaica Center has a strikingly similar disposition to 149th street and 3rd Avenue in the Bronx also known as “The Hub” or “Mini Times Square.” Jamaica Avenue is the staple piece of this retail corridor, with a stretch of tenants ranging from mom & pop shops to most recently National Tenants such as Chipotle, who opened their first flagship store in the borough of Queens on Jamaica Avenue. With over 300 stores reflecting a mixture of ethnicities, Jamaica Avenue is one of New York City’s most pulsating shopping corridors. Positioned in the heart of Queens, Jamaica Center has 3 performing arts centers, dozens of landmarked historic gems, a park, 2 colleges, a major transportation hub, and hundreds of independent businesses and blue-chip department stores. This is a telltale sign of the changing times of an area where not too long ago it was easier to score drugs on the street than food.
The question to real estate experts can be condensed into one simple line:” What does this all mean?”
Well, that’s not such an easy question to answer, but as a broker who has studied this area and tracked every single trade that occurred in the past 3 years, I believe that Jamaica has untapped potential in regard to gentrification and outer borough development. The foundation for this notion was laid by the Bloomberg Administration with their rezoning initiative, which revived a once condemned city by allowing the buildable square footage or FAR (Floor Area Ratio) of low rising buildings to allow for higher height development, thus incentivizing developers and investors to develop this land seeking high returns. It took a full 10 years of coaxing timid developers and investors to infiltrate Jamaica with their ideas and infrastructure. But like a popular idea, once the majority gets wind of it, it becomes contagious, and this can be justified in the 3,500,000 square feet of development just within a one-mile radius of Jamaica Terminal.
As development fever spread across Jamaica, permits started to pour into the DOB database and as a result, development site price per foots began to climb in the area from an average of $50 per http://one-crs.com/wp-content/uploads/2018/05/pic2.jpgfoot to the current market rate of about $100 per foot. In total, about 584 commercial properties have been traded in the Greater Jamaica Area since January 1st of 2015. The centerpiece for the Downtown Jamaica Revival Initiative was led by affordable housing giant BRP Development’s “Crossing at Jamaica” a one block super development at 93-01 Sutphin Boulevard consisting of 773,000 square feet of mixed-use development comprised of 669 rental units, 35,000 square feet of retail space, and 187 above-grade parking spaces.
When ground was broken for development back in 2017, Jamaica’s Deputy Mayor for Housing and Economic Development Alicia Glen was quoted describing the project as “The first true-mixed income project that strengthens the whole neighborhood.” 90-75 Sutphin Boulevard will be a 19 Story 100,000 SF Hotel Development. Directly next door to 90-75 Sutphin Boulevard is my own listing at 147-18 & 147-20 Jamaica Avenue, as well as 92-12 147th Place a corner development site assemblage sitting on 3 separate lots with 33,000 BSF. Both sites signify the vision of developers, big and small to seize the opportunity of a prime location area with low prices and high returns. Within just a half mile radius, over 3,500,000 square feet of commercial and residential space is in the development process.
The implications of this real estate renaissance not only alters the landscape and perception of what was once “Jamaica,” but rather the entire Borough of Queens. We often forget the borough is the second largest in population after Brooklyn with a census estimated population of 2,333,054 residents as of 2016, nearly 48% of them foreign-born, making it the most ethnically diverse urban area in the world. If each of New York City’s boroughs were an independent city, the borough would be the nation’s fourth largest city by population, following Los Angeles, Chicago, and Brooklyn. http://one-crs.com/wp-content/uploads/2018/05/pic3.pngThe housing demographic of Queens ranges from high rise apartments in urban areas such as Long Island City, Astoria and Flushing, to low rise suburban neighborhoods in South Queens areas such as Jamaica Estates, Ozone Park & Howard Beach. The Queens economic sector is by far the most diversified and lucrative compared to its counterparts of Brooklyn, Bronx and Staten Island. It is home to two of New York’s largest airports, LaGuardia & JFK International Airport as well as Aqueduct Racetrack, Resorts World Casino, Citi Field (home to NY Mets) and USTA Billie Jean King National Tennis Center (home to US Open). LaGuardia Airport sees approximately 30 million passengers per year and is the busiest airport in the U.S. without non-stop service to Europe. The airport is currently undergoing an $8 Billion renovation that would bring a linking Air Train service from Manhattan to LaGuardia, at the Willets Point stop on the Long Island Railroad.
From an investor’s perspective, Jamaica sits at the crossroads of everything in New York. It is 20 minutes in every direction to Manhattan, Nassau County-Long Island, JFK Airport and once the Air Train is completed, LaGuardia Airport. The evidence of hotel permits flying into the DOB supports the vision of an influx in tourists, travelers, and citizens of New York to this geographic epicenter of New York.
As time passes, and the green development walls begin to come down around Jamaica, New Yorkers will undoubtedly have opinions regarding the “new Jamaica.” Whether they are all in on the idea or need to still be persuaded to the impact this revival will have on the city, one thing is for sure; Jamaica will never be the same place again.
Louis Peter Cotrone is a Director of Investment Sales at ONE Commercial Realty.
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