In a Real Estate-centric town like New York, everyone is always writing and talking about Manhattan. But activity in the outer boroughs and Long Island is also heating up, according to a group of leading developers who spoke at a recent panel discussion. Long Island, in particular, is starting to get some new rental properties built, which employers on the island are clamoring for, said Gregg Rechler, Managing Partner of Rechler Equity Partners.
“The biggest issue for commercial tenants on Long Island is finding good, quality housing for their employees,” Rechler noted. “Finally, more municipalities are starting to create multi-family, workforce housing.”
Rechler spoke at the Nov. 20th event, “Let’s Talk Brooklyn, Queens and Long Island Real Estate,” which was hosted by Margolin, Winer & Evens LLP, an accounting and business advisory firm that has been working with Real Estate developers and owner/operators for more than 60 years. The panel was moderated by The New York Observer Senior Editor, Kim Velsey.
Rechler is currently building a project in Amityville, and says local governments are starting to realize that providing incentives for this kind of housing can lead to greater economic development.
Doug Partrick, owner of Heatherwood Communities, is also an active developer on Long Island, but notes that community barriers to development makes completing projects a difficult task. “It can take 5, 6, 10 years to push a project through,” he noted, due to push back from the communities.
That kind of push back has prompted Partrick to expand Heatherwood’s presence in recent years to Williamsburg, Brooklyn and Long Island City in Queens, with a 470 unit rental building in LIC slated to be completed in early 2015.
Emerging neighborhoods like Long Island City and other, more settled areas like Williamsburg and Greenpoint, Brooklyn are also attractive to Jeffrey Levine, chairman of Douglaston Development. “We look for neighborhoods where there was already a neighborhood and vitality. Williamsburg and Greenpoint were originally bedroom communities for Eastern European immigrants. The existing housing stock was already there in the form of tenements that could be altered to suit young people, and there were groceries and other retail stores in the neighborhood.”
The other thing these areas have in common is that they are transportation hubs. The panelists agreed that it is still difficult to develop far-flung areas like Coney Island or Far Rockaway because they are primarily populated by public housing and don’t have enough transportation options or the kind of population to support retail stores.
Asked how they manage to get projects built with so many obstacles in their path, Rechler noted that patience and a long term plan are key. “This is a business of managing cycles,” Rechler said. “We lived through more than our share over the last 20 years. We try to build pipeline in the down cycle and underwrite to the lower rents. Then we work to get entitlements and build in the up cycle. Managing land holdings is critical. The way to do it is take advantage of down cycle, which is what we’re doing.
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