Evan Daniel joined Modern Spaces in August as the executive vice president of the firm’s new commercial property division. Before landing at the Long Island City-based real estate company, Daniel worked with Massey Knakal since 2006, covering Long Island City and Astoria. Daniel, who has been married for almost a decade and has two children, also enjoys coaching basketball to seventh- and eighth-grade children at Yeshiva of Central Queens.
In a question-and-answer session with The Courier, Daniel explained the current status of the commercial market in Long Island City and the problems it faces.
Courier: What is the status of the commercial market in Long Island City?
Daniel: “White-hot and crazy. It doesn’t make sense. We are seeing land values that have literally tripled in a year. We shot passed $200 [per buildable square foot] earlier this year and in the best parts of Long Island City you’re seeing $225, $230, $250, and quite frankly people look at it as a bargain. Some people just look at Long Island City as a comparison to Williamsburg and they say ‘Well, in Williamsburg we’re paying $300 or $400 a buildable square foot.’ In Manhattan it’s over a $1,000. So in Long Island City, it looks cheap.”
Courier: Who is investing into the market?
Daniel: “The money coming into Long Island City is mostly foreign capital right now. I’m on the phone almost every night with investors from Shanghai, and they’re 12 hours ahead so you know what, they start their day 8:30 a.m. in the morning, that’s when I’m finishing my day, 8:30 p.m.”
Courier: How are these foreign investments affecting the market?
Daniel: “It keeps prices arbitrarily high. I can tell you the numbers today are much higher than what they should be and there is a lot of product coming on the market and I think right now a lot of speculation. I think there is going to be some sort of correction in the market where these numbers will come back to Earth a little. They probably already would have, if not for the influx of foreign capital.”
Courier: What would you tell someone that owns property in Long Island City now?
Daniel: “I don’t think we are going to $300 a buildable foot. My advice to sellers or owners if you have a development site is to build up when you have financing available, find a partner to build with you or sell it to somebody who is going to build.”
Courier: Now that more people are living in Long Island City, do you see more office and retail developments coming?
Daniel: “If you moved into this market with the first wave of developments six or seven years ago, it was dead at night and weekends. You’re starting to see more influx of retail. We need to see more big-box retail. Retail definitely will come and it should be able to come, because now you have so many people here and you have tremendous amount of jobs, and employees are here during the day, so now you can sustain retail.
“Office is difficult to say. Because it’s needed and it should happen and we are going to get a tremendous amount of demand we hope in the next couple of years as Roosevelt Island continues to build the Cornell Tech campus and that is going to create a lot of tech jobs and more creative jobs instead of more intensive labor jobs. The question is where are they going to go? Because there is no new construction of new office space and there is no incentive for developers to build new office space, because new office space is not as valuable as residential. So if I have a residential zoned area and I am a developer and I now have to pay $200 a buildable square foot, I can’t justify doing an office building. I will make less money on my office building than I would on my rental building.”
Courier: What must happen to get developers building more office space?
Daniel: “The city needs to figure out some sort of incentive to developers, whatever it may be, for somebody to build new offices. If [Long Island City] had these offices it will keep people here and it’ll give people incentive to stay here or come here, which will help the overall market. You will have your office market, you will have your retail market, and you will have your residential market, and they’ll all be in one mini-city in LIC.”