Queens Storms Ahead As NYC’s Number One Neighborhood For Investors
For once, Brooklyn takes a backseat as Queens lures the most investment capital of all NYC boroughs.
It’s official—Queens is the new Brooklyn. Investment property sales went through the roof in 2016, with the dollar volume breaking all records and prices appreciating more than any borough. That’s according to Ariel Property Advisors’ newly released Queens 2016 year-end sales report.
Here’s the hard data. Last year Queens registered 643 transactions consisting of 897 properties totaling approximately $4.9 billion in gross sales. The reason for the surge is affordability. Manhattan and Brooklyn are great places to park your cash if security and prestige are your priorities. But Queens is still relatively affordable, which accounts for its high appreciation rates.
Some more numbers: Dollar volume surged 11 percent, despite a nine percent and a six percent decrease in transaction and property volume respectively, compared to 2015. Higher priced deals were increasingly the order of the day with institutional investors. There were 44 transactions over the $20 million mark up—six and eleven such transactions in 2011 and 2012.
“It was a big year for big deals,” says Michael Tortorici, EVP at Ariel Property Advisors. “This trend should continue as more and more institutional investors acknowledge the significant upside potential offered by properties in the borough.”
The much discussed 7 train, which runs to Hudson Yards, continues to blaze a trail through Queens, igniting the Northwestern section. This was where most of the action was—with 64 percent of all transactions, or 411, and 71 percent of dollar volume. Multi-family properties were the primary targets—with a hefty 39 percent over 2015. Deals weren’t consistent, however. At some points, the pace dropped, indicating not a lack of interest but, conversely, supply could not keep pace with demand.
“Due to the room for rent growth, the wealth of transportation options, and overall stability of the neighborhoods, the multifamily asset class continues to play a pivotal role in the success of the borough’s investment market,” says Daniel Wechsler, a director at Ariel Property Advisors.
His words are born out by recent data from roommate app Roomi, which shows the millennials favor Queens when it comes to searches for shared accommodation.
Queens saw 15 percent price growth in the multi-family segment overall in 2016. The growth is set to continue in 2017. Prime neighborhoods such as Sunnyside, Woodside, Jackson Heights and Astoria continue to grab headlines. But if it’s pure equity appreciation investors are after, they might want to investigate Jamaica. The often maligned rough and tumble neighborhood finds itself increasingly in the midst of transportation and growth.
The population jumped by a mighty 39 percent in 2015 and is experiencing rapid gentrification. House flipping, a sure sign of an area’s sudden appreciation backed up the data with a 2015 study conducted by the Center for NYC Neighborhoods showing Queens neighborhoods such as South Jamaica, St. Albans and Springfield Gardens saw some of the most dramatic increases in property value. These neighborhoods experienced a total of 246 flips over the course of the year.
Elsewhere in Queens, plans to rezone a 50-zone swathe of Long Island City in an effort to increase office space and affordable housing, only stoked fears of further gentrification from locals.
“You have crumbs of possibly true affordability, but then you have 80 percent that are luxury,” Jenny Dubnau, an artist with a studio in Dutch Kills, Queens told DNAInfo at a recent community meeting at CUNY Law School. ”When you have the luxury buildings coming in, it drives up surrounding rents. It’s not just the buildings that are being built that’s affected — there’s massive displacement happening.”
It’s a story that Brooklyn residents are only too familiar with.
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