Breaking new ground in Long Island City.
Though it offered spectacular views of the Manhattan skyline and was served by at least five subway lines, the neighborhood's mix of mostly industrial buildings and warehouses was not particularly appealing to tenants of any other kind. All of which makes Richard Karson's decision to open an Insignia/ESG office there five years ago the more gutsy, if even less comprehensible.
"This was an outshoot of our Long Island office," Karson explains. "We did not do enough to increase our market share in the outer boroughs, so it was my idea to open an office in Long Island City. In that respect, we were kind of ahead of the game. None of the majors have an office here, besides Insignia."
By the passion with which Karson talks about Long Island City, as well as by the knowing glances of his fellow brokers, it's obvious he is both enthusiastic and a little apprehensive about what is going to happen to the area. On the one hand, he harbors a hope that the neighborhood will become the site of "the next major development."
On the other, he understands perfectly well that it will need both the help of the City and a certain amount of luck to "emerge" in the full sense of the word.
"Long Island City has always been a hub part of the city," he points out. "True, it was an industrial hub, but transportation made it an employee destination. There is a lot of interest now from health-related institutions, insurance firms, data centers for banking. And our benefit package is different from New Jersey -- it's geared toward the employee, so we get the back-office operations."
Karson's right hand man, John Reinerston nods in agreement. "We've been working closely with the Schumer Group of 35 and the New York City zoning commission," he adds. "We have these reap benefits, $3,000 per relocated employee, so coming out to Long Island City can effectively drop your rent. And with the zoning changes, major development companies can come out and assemble the product, basically lay it out for office tenants."
For Reinerston, the revitalization of Long Island City is probably even more of a personal dream than for Karson. As a young broker with Henry Levine he took part in the construction of the now notorious Citibank building, the first major office building in Long Island City.
"I've been here since 1983," he smiles half proudly, half dejectedly. "I was here when Citibank put its building up. Unfortunately, we had a bad market then and development didn't really take off. But right now it's a happenning place. Hopefully, we will have a good market long enough to make it happen."
All the brokers in the Insignia office, however, assure that as an industrial market Long Island City couldn't fare better.
"The big talk here is about change to the commercial market," puts in William Jordon. "But I do commercial and industrial brokerage in all of the five boroughs and Long Island City is easily the strongest industrial market. We are close to the City and it is convenient for distribution. On the industrial side, we handle national clients, like Waste Management and Outward Bound."
Jordan is easily the most optimistic of the group. As long as the office is doing a steady volume of transactions, even if they are not office deals, he sees the glass as being half full. But for Karson and Reinerston it's different. They need to see Long Island City finally live up to its potential. It's not a matter of commission. It seems to be a matter of professional pride.
"Now you have incentives, you have MetLife taking the first step," Karson says. "It's a combination of incentives and of market conditions that have developed over time. We've done about 800,000 SF of office leasing transactions in the past six months. Before these kind of product didn't even exist!"
As for Reinerston, he maintains a cooler approach. "Between MetLife moving here and Citibank, they will make sure that a lot of thing will happen," he assures. "But if there won't be an overflow from Manhattan, Long Island City will languish as an industrial market."
A few weeks after our meeting, the City passed the zohing changes proposal, giving Long Island City 37 new blocks for unlimited, mixed-use development. I contacted Reinerston to ask if this spelled success.
"Without the zoning we could never move forward," he responded. "But the market is not as strong now as it was last year. We need another commitment like MetLife's. Hopefully, that will be the case."
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Insignia/ESG office|
|Publication:||Real Estate Weekly|
|Article Type:||Brief Article|
|Date:||Sep 12, 2001|
|Previous Article:||Grubb & Ellis New York.|
|Next Article:||Lincoln Building undergoing $30M renovation project.|