Residential real estate prices have steadily been increasing in Queens over the last few years, and a new report found that developers are also willing to pay more for commercial space in the “World’s Borough.”
According to CommercialCafe‘s 2016 Commercial Report, Queens had a total of 13 commercial space transactions with an average of $762 per square foot. That number marks a 28 percent increase from 2015 when the average was $633 and a 116 percent increase since 2012 when the average price was $353.
Not surprisingly, the raw data shows that many of the transactions in from 2012 through 2016 occurred in Long Island City, Astoria and Flushing. In 2016, these neighborhoods accounted for 11 of the 14 transactions.
In Long Island City, the average price per square foot was $647. In Flushing that number was almost double at $1379 and the transactions in Astoria reflected numbers seen in 2012, with the average price per square foot at $366.
Southeast Queens has one transaction at $271 per square foot, which increased from $160 in 2014.
There have been announcements of several new office spaces being constructed in western Queens, especially Long Island City. But the city wants more and is expected to rezone sections of the neighborhood to encourage developers to build more commercial space rather than residential.
At a meeting to announce the possible rezoning, several business owners argued that their rent was increasingly going up and City Planning officials attributed this spike to the lack of office space in the neighborhood.
“Zoning right now only allows market-rate housing,” said Penny Lee, senior planner for Queens. “So we can do nothing and allow development to continue as it is and not get any affordable and not try and encourage office space to relieve pressure, or we can do a study like this and look at ways of applying an affordable housing requirement and look at ways to encourage office development so we can get a more equitable neighborhood.”
In Manhattan, price per square foot climbed to a five year high at $1,531. Citywide, 128 office buildings were sold in 2016 for a total of $21.1 billion.
The study analyzed commercial office transactions of more than $5 million and office buildings and spaces of over 5,000 square feet, from 2012 to 2016, based on Yardi Matrix and PropertyShark sales and proprietary research. The sales included were recorded up until Jan. 25, 2017.