Stephen Preuss is a vice president at Cushman & Wakefield who focuses on the Queens market.
Last year, we discussed the Flushing market driving expansion outwards to the surrounding areas of Flushing.
Not only retail but also development potential has been slowly making its way to other territories. The lack of inventory and constant high demand in the Flushing area has forced investors to expand their area of interest. Since 2012, the cost of retail and commercial property has been gradually rising throughout Queens, most recently in the highly trafficked areas of Bayside.
In 2012, we saw commercial properties including retail and mixed-use selling for an average of $550 per square foot with prime properties on Bell Boulevard selling in the higher range of $600 and secondary areas selling in the $320 range – the same could go for 2013.
In 2014, we started to see the demand for Bayside commercial real estate rising. Prime retail sold at an average of $615 per square foot, a 12 percent increase from 2012. We sold a mixed retail and office building at 39-26 Bell Blvd. for $737 per square foot in 2014, 34 percent above the average for 2012 and 2013. We also currently have a package of mixed-use buildings under contract on Bell Boulevard at over $700 per square foot and a 4.8 percent cap rate.
We have been seeing recently that the awareness of Bayside’s potential has greatly increased with investors. Bayside offers a wide range of opportunity including tremendous development potential on Northern Boulevard as well as Bell Boulevard. Numerous sales within the past year have been transacted with the intentions of redevelopment. For example, 42-21 through 42-29 Bell Blvd., a nine-unit, mixed-use retail strip with multiple credit tenants, sold for $645 per square foot at a 3.98 percent cap with existing income. From a development standpoint, the property can be built up to 28,220 square feet which is an additional 17,510 square feet on the existing building.
We expect to see the action continue in Bayside through 2015 and the coming years. A large amount of the territory in Bayside has been untapped and holds great potential for development and could lead to a growth in real estate investors, developers and major retail tenants.
- Bayside restaurant Il Vesuvio moving, expanding and changing name
- Former LIC factory building creating retail and office hub with help from an old rival
- 208-unit affordable housing and retail project selected for Flushing parking lot