Astoria's past and present promises investors a bright future.
I believe Astoria enjoys large investment projects because of its past, present and future.
First, let us look at Astoria's past. The area was the first part of Queens to be settled in 1640. In the early 1800s, wealthy Dutch immigrants invested their money and built huge homes, churches, mansions and cemeteries, most of which are still standing today.
In the mid-1800s, the influx of European immigration began. This migration brought piano factory owner, William Steinway, to Astoria. Steinway did wonders for his factory workers and the community by building schools, churches and row houses. At the end of the 19th century, Astoria had the highest absorption of trade in the United States. Between 1920 and 1940, large numbers of Greek, Italian and Irish immigrants joined the community. Since the 1980s it has gotten much more diversified.
Today, Astoria is one of the most exciting and fastest growing communities in New York City. It is a mix of emerging businesses, amazing nightlife, Zagat-rated eateries, historic row houses and exciting new property developments.
Places such as the recently landmarked Astoria Park pool and Astoria Park add extra character to this extraordinary area. Its transportation system is second to none. Astoria is only a 20-minute ride on the W or N train to midtown Manhattan and is surrounded by the Triborough and Hells Gate Bridge.
The future looks bright for investors and the community. Per capita, Astoria is one of the safest neighborhoods in New York City. With new business coming to the area, future job growth stands at 3.64%, even though interest rates are rising and talk of a housing correction loom, prominent investors are flocking to the area. I believe they see the upside in market rents because of Astoria's vibrant economy.
The decline in housing ownership due to rising home prices (15.57% appreciation by year end 2005) and rising interest rates are leading to more renters with a shortage of supply. Astoria has a vacancy rate of a stunning 0.65%, compared to the national average at 14.48%, and a rental rate of approximately 82.13%, compared to the national average of 21.45%. Housing units owned by the occupant are a minute 17.22%, while the national average is 64.07%. These figures tell us that the vast majority of Astoria's residents are renters.
New developments will provide modern housing and amenities that are much needed for the future of this area. The rental market is very strong and demand continues to grow. Smart money investors realize this and are acquiring property accordingly.
One example of recent aggressive investment activity in Astoria is the joint venture of the highly regarded firms, Principal Real Estate Investors and The Dermot Co. In May 2006, they acquired two portfolios consisting of 121 units with an occupancy rate of over 90%. It marked the first investment of the Joint Ventures' plan to further invest $300 million in properties in New York City. They have allocated $100 million in equity toward this project.
One of the reasons they selected Astoria as their primary choice for the acquisition of rent-stabilized apartments is because John Fradson, managing partner of the Principal Real Estate Group, found it to be a better investment than present opportunities in Manhattan, according to reports.
Another huge venture was carried out in June 2006 by Grand Review LLC (Urban American Management Corp.), a real estate investment and management company based in New Jersey. They have purchased four elevatored apartment buildings in the surrounding area of Astoria (Sunnyside and Woodside) for a total of $45,635,000. The portfolio contains 350 units and has over 273,000 gross square feet.
The Department of City Planning is also considering an application for a zoning change for a large development project on 35th Street in Astoria. The developers are trying to rezone the M1-5 zone to C4-2A with a R6A overlay. The zoning change is actually a downgrade from 85 feet and a FAR of 5.0 to 70 feet in height and a FAR of 3.0. The decrease in the maximum height allowed is needed to facilitate the development of this project. The development would contain two 7-story residential towers with commercial use located on the ground floor. The developer is also planning to include 100% underground parking, a bridge connecting the buildings and a rooftop recreation center. Since the application is still under review, it is not clear if they build condominiums or construct rental units.
The future of Astoria is very bright. The coming months should bring a stirring array of investments and developments by motivated individuals. Astorians are definitely living in exciting times. Stay tuned.
BY RUBIN ISAKHAROV, BROKER, MASSEY KNAKAL REALTY SERVICES
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|Title Annotation:||Commercial Sales & Leasing|
|Publication:||Real Estate Weekly|
|Date:||Aug 2, 2006|
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