LIC Real Estate Breakfast

LIC Partnership Breakfast Projects Confident & Competitive Tone

April 23, 2014 / LIC Neighborhood / LIC Real Estate / Queens Buzz. I attended the LIC Partnership Real Estate Breakfast on Wednesday morning at the Con Edison Learning Center in LIC. The past couple of years the event had been held at Court Square Place on 44th Road in LIC, to a standing-room-only crowd. The event attendance continues to grow, and the move to the Con Ed Learning Center made seating possible for everyone in attendance.

The 8 am breakfast is followed by a moderated discussion panel of speakers representing a cross section of LIC real estate investors, real estate managers, retail or restaurant operators and a reporter who covers and is familiar with the LIC real estate market. The discussion provides a mix of perspectives and opinions about what’s happening in LIC.

A conglomeration of LIC real estate commercial, industrial and housing stock is shown in the photo to your right. Quite a number of aspects about it were discussed at the breakfast as recorded in this report.

This year the panel included … click here to read the rest of our report about LIC real estate, including photos of the LIC Partnership Real Estate Breakfast.

LIC Real Estate Breakfast

LIC Partnership Breakfast Projects Confident & Competitive Tone

April 23, 2014 / LIC Neighborhood / LIC Real Estate / Queens Buzz. Continued.

LIC Real Estate - LICP Breakfast Speakers & Backgrounds

This year the LIC Partnership Real Estate Breakfast panel included Arvind K. Bajaj, who is a Managing Director of Madison Marquette [a real estate investment company]; Erhan Bahceci, Owner Foodcellar & Co Market; Cathy Dove, VP Cornell NYC Tech; Amanda Fung, Sr News Producer of Crain’s NY Business; and Rachel Loeb, Director of Development for the Worldwide Group. The supplemental background information that follows was compiled outside of the meeting by Queens Buzz.

In the photo to your right is Elizabeth Lusskin, President of the LIC Partnership and Executive Director of the LIC Business Improvement District [LIC BID], talking about the organization's supporters, plans and responsibilities. Please note that there is a photo slide show with a link to an album of photos of the event below.

Arvind K. Bajaj - Madison Marquette - LIC Real Estate Investors

Arvind K. Bajaj works at Madison Marquette which is based in Washington D.C. and has an office in Manhattan [there does not appear to be any Midwestern or Wisconsin connection as the name suggests]. In early 2013 Madison Marquette did a joint venture purchase with affiliates of Perella Weinberg Partners. They bought 450,000 square feet of mixed use space that is called the LIC Center Building at 33-00 Northern Blvd. Perella Weinberg appears to be a conglomeration of entities [hence the notation of affiliates] designed to maximize profits via real estate management and transactions. Perella Weinberg Partners affiliates began operations in 2008.

Erhan Bahceci - Foodcellar & Co Supermarket in LIC

Erhan Bahceci is one of the owners of Foodcellar & Co of LIC. Three partners with significant experience in the food business opened the LIC store in 2008. Foodcellar & Co is located just off Center Blvd by the East River in LIC. He is also an LIC resident.

In the photo to your right, Erhan Bahceci of Foodcellar & Co, is shown talking about the challenges the supermarket overcame in its early years when the economy turned south and a lot of expected new housing construction was put on hold. At left is Arvind K. Bajaj of Madison Marquette and at right is Cathy Dove of Cornell NYC Tech.

Cathy Dove - Cornell NYC Tech - Roosevelt Island

Cathy Dove is the VP of Cornell NYC Tech. Cornell NYC Tech is a joint venture between Cornell University and Technion – Israel Institute of Technology on Roosevelt Island. The school was former Mayor Michael Bloomberg’s initiative to attract science and technology human capital to NYC. The graduate school is to be built on Roosevelt Island, but the school began post doctoral operations in February of 2014 in rented / donated space in Manhattan.

Amanda Fung of LIC - Crain's New York Business

Amanda Fung is a Senior News Producer for Crain’s New York Business. She has more than six years experience covering residential real estate and development in NYC’s outer boroughs. Like Erhan, Amanda is also an LIC resident.

Rachel Loeb - World-Wide Group - LIC Real Estate Investors

Rachel Loeb is Director of Development for the World-Wide Group. The World-Wide Group is generally associated with tycoon Victor Elmaleh. In 2012 the World-Wide Group purchased 40,000 square feet of space at 24th Street just north of the Queensboro Bridge. According to The Real Deal, the World-Wide Group also has a property in Midtown which is home to a Whole Foods Market.

This is the end of Queens Buzz supplemental background research. In the photo above [l to r] is Cathy Dove, Amanda Fung and Rachel Loeb.

LIC Real Estate - Introduction of the Breakfast Hosted by LIC Partnership

Carol Conslato, the Public Affairs Director of Consolidated Edison, welcomed everyone to the Con Ed Learning Center. She was followed by Elizabeth Lusskin, the President of the LIC Partnership, who talked about the LIC Partnership’s role in the community, thanked various contributors / sponsors of the program and told us about a couple of upcoming LIC Partnership events [LIC Springs on 5/17 and LIC Now on 6/17 - see slide show for details]. And NYC City Councilmember Jimmy Van Bramer made a few remarks before David Brause, the President of Brause Realty, began moderating the discussion.

In the photo to your right Carol Conslato of Con Edison is shown addressing the LIC Partnership Real Estate Breakfast attendees.

LIC Real Estate Market - Dynamic & Changing

Amanda of Crain’s talked about how the LIC real estate market had changed. She noted that the biggest change has been an explosion of rental units in the LIC market over the past few years. It used to be challenging to find a modern apartment to rent in the Long Island City real estate market and now there appears to be ample supply.

Cornell NYC Tech - Roosevelt Island Campus Will Likely Bolster LIC Real Estate

Cathy of Cornell NYC Tech talked about the school’s plans. They expected to open the campus in the summer of 2017 on Roosevelt Island. This would be phase I of the plan. Some entity just transferred a hospital to the school and they expect to begin demolition of the building soon. You’ll soon see barges moving along the East River with its debris.

Construction of the school will begin in early 2015. The first phase of the construction will include between three and four buildings. One of the buildings will be the primary academic building for students and faculty. The second building will be designed to enable corporations to co-locate on the campus. The third building will be designed to provide student / faculty housing. And the fourth building will be the Executive Education Center which will target continuing educations programs for executives.

The overall plan has several phases and will be executed over a 25 year span of time. David Brause is shown in the photo at right, moderating the LIC Partnership real estate breakfast.

World-Wide Group - City Lights Building & Soon QLIC Building At Queens Plaza

Rachel said that her company was one of the early pioneers of the transformation [my words] of the Long Island City real estate market. The World-Wide Group had partnered with another company in erecting the City Lights Building quite a number of years ago – click here for a prior story about the transformation / gentrification of the LIC real estate market.

In 2011 / 2012 the World-Wide Group purchased a lot at 24th Street and Queens Plaza North for roughly $28 million. They broke ground in 2014 and plan to create a 21 floor building in an effort to add 421 apartments / units to the LIC real estate market. The building is primarily residential [it’s been reported that it will have over 300,000 square feet of residential space] with a bit of retail [under 9,000 square feet].

Rachel told us that the building would top out at 400,000 square feet [perhaps not in first phase?] in July [summer of 2014] and that they expected to start leasing it in the first quarter of 2015. She mentioned that they planned to include a lot of amenities [perhaps this accounts for some of the 100,000 square foot differential between what she said and what’s been reported?]. The photo at right shows the new World-Wide Group QLIC Building going up at Queens Plaza in LIC.

Rachel said the World-Wide Group liked the transportation infrastructure in the Queens Plaza / Court Square area, which has access to 8 subway lines. And they knew that LIC was an up-and-coming market and that the school of Roosevelt Island had the potential to increase demand by people attending and graduating from that school.

Foodcellar & Co Supermarket - Expanding To Serve Growing LIC Neighborhood

Erhan, of Foodcellar & Co, talked about the challenges of opening the store in the summer of 2008, right before the financial crisis. The financial crisis dried up investment cash and slowed / stopped most of the real estate development in LIC. This made managing the LIC supermarket challenging throughout the first four years of operations because the residential population grew much more slowly than what they had anticipated.

But he noted that the past couple of years have been good and Foodcellar & Co is now working on opening a second store in the Queens Plaza / Court Square area.

Erhan also talked about the community aspects of living and working in Long Island City. He talked about Foodcellar & Co as a community of people in tandem with the LIC community at large, and noted that people are excited to be living here. The photo to your right shows the new Foodcellar & Co store in the Queens Plaza / Court Square section of LIC, which will open in the late summer / fall of 2014.

Madison Marquette - LIC Center Building On Northern Blvd

Arvind talked about the Madison Marquette real estate purchase of the LIC Center Building in Long Island City at 33-00 Northern Blvd. He and his company liked the building, which they bought for $109 per square foot over a year ago. They echoed Rachel’s sentiments about public transit access and the quality of the building they purchased which had been first built as a Model T assembly plant nearly a century ago [roughly 90 years give or take]. They also like the relative value vis a vis Midtown, the investment tax benefits offered by NYC and even the access to the LIRR [there’s a periodic station stop a long block south of Queens Blvd between Thomson and Court Square. They were also aware of the Cornell Technion school plans which they figured would keep the neighborhood on its upswing trend. Since they purchased the building the economy has been turning and it is fully occupied.

The discussion turned to what’s needed and what’s next.

LIC Real Estate - Market Futures - Schools & Amenities

The talk began with the school arrival on Roosevelt Island and what impact that might have on the neighborhood. Cathy talked about developing a techno eco-system to support the growth of technology jobs and opportunities in the area. One of the things Cathy mentioned she’d like to see is increased ferry service access on this side of the East River. And someone chimed in about getting Citi Bike started out here too.

Rachel mentioned that they were interested in the amenities of the surrounding neighborhood at Queens Plaza North and that they would like to see another food retailer along the lines of Foodcellar & Co, as well as easy access to items normally found at a large drug store / pharmacy. She expected that there would be 700 people living in the 400 new units after they were completed and rented. And she noted that she’d like to see more retail infrastructure along the lines of things like nail salons and food and drug stores to provide the necessities of everyday life. Her company has about 9,000 square feet which they will use to attract such amenities.

In the photo at right is the extension of / new park along the East River waterfront in LIC.

LIC Center Building - Real Estate Along Northern Blvd In LIC

Arvind said that 1,000 people live in the LIC Center Building and that another 1,000 people visit it [daily?]. He noted that retail is coming in on the ground floor and echoed the sentiments that tenants are looking for the daily amenities from the surrounding neighborhood that Rachel had talked about.

The discussion turned to concerns.

LIC Real Estate - Market Issues - Private & Public Infrastructure Capacity

Cathy pondered the ability of the NYC public transportation system to keep pace with the changing neighborhood, given the weekend work efforts / outages on the #7 subway line now.

Rachel said it was good to see new schools coming into the neighborhood like the one planned for Hunters Point, but that more needed to be done to catch up / keep pace with Long Island City population growth. In response to a question posed by HoongYee Lee Krakauer, Executive Director of Queens Council on the Arts, Rachel also mentioned that she considered having cultural institutions nearby - she mentioned PS1 MoMA and Socrates Sculpture Park - added to the overall attractiveness of the area.

David Brause - Artists As The Change Agents In The LIC & NYC Real Estate Market

David Brause chimed in, stating that developers follow the pioneering artists into gritty neighborhoods, as the artists help transform them and make them attractive places in which to live. He also said we could expect to hear some new announcements in the LIC retail space sometime soon.

Michele Beaudoin - LIC Real Estate - Scant Housing Stock For Family Growth

Michele Beaudoin of the Beaudoin Realty Group asked what was being done to address the interest by young couples who want to move into larger living spaces as they have families. She compared the current LIC rental market to Battery Park City in decades past, where they didn’t have larger units to accommodate growing families that wanted to stay in the neighborhood. Michele Beaudoin, of the Beaudoin Realty Group, is shown in the photo to your right.

Rachel said the World-Wide Group new building at Queens Plaza North would have 20% of its units in the two / three bedroom range. There might also be opportunities in re-zoning for residential.

Alan & Stuart Suna - The Economics Of Real Estate Development In LIC

Alan Suna, of Silver Cup Studios and a residential and business real estate investor, talked about building conversions, which enable prices / costs of $30 - $31 per square foot versus new building construction which requires prices / costs of $47 - $51 per square foot.

The Sunas are shown in the photo at right, seated one row behind and to the left of the blond woman at right.

There was some talk about prices and relative value vis a vis Midtown and Midtown south. Values in LIC are well below those in Midtown, but not enough vis a vis Midtown south.

Arvind said you don’t necessarily have to rip down buildings to get good tenants. He noted that Jet Blue is in a renovated older building and they’re happy tenants. Plaxall-type buildings can be re-purposed for modern use. The Flatiron district is full of them.

All in all I found the breakfast informative and hope you did too. Cheers.

The LIC Partnership Real Estate Breakfast Photos & Slide Show

Click here to view the LIC Partnership Real Estate Breakfast photos.

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