January 16, 2019
New York Post: The most exciting ’hood in New York is miles from Manhattan

The Big Apple’s most dynamic outer-borough neighborhood isn’t Long Island City, but downtown Flushing — a boom town that transcends its popular perception as merely the largest of the city’s Chinatowns.

The executive vice president of dominant Flushing developer F&T Group, Helen Lee, calls the area “a dynamic cultural hub with global appeal and one of the most sought-after real estate markets in the city.”

A few decades ago, it was “a blighted Queens neighborhood,” Lee adds. F&T, which has developed or is working on five major projects there, is the prime mover behind the upturn — but not the only one.

Jonathan Plotkin, an executive vice president at Colliers International, estimates there are about 3 million square feet in the development pipeline. Much of it’s from F&T, which built Flushing Commons (with Rockefeller Group and AECOM Capital), Queens Crossing and One Fulton Square (with SCG America). F&T is now working on Tangram (also with SCG) — a 1.2 million-square-foot, mixed-use project named for the Chinese puzzle that’s said to have inspired it. (It was originally named Two Fulton Square.)

Tangram’s first residential phase of 192 apartments is nearly 100 percent sold out. The complex is set to include a total of 320 residences, a hotel, 275,000 square feet of retail and a 34,000-square-foot Regal multiplex that will boast 4DX special effects technology.

Meanwhile, George Xu’s Century Development is working on 137-61 Northern Boulevard, a ground-up project that will include a 250-key Westin Hotel. Xu is also planning an apartment/hotel/retail building called The Farrington at 134-37 35th Ave.

Onex Real Estate Partner’s Sky View Parc — the mammoth, six-tower complex where Roosevelt Avenue meets College Point Boulevard that has views of Citi Field, the 7 train and Manhattan — hit its stride after a troubled start under original builder Muss Development. The project’s luxury apartments quickly sold out. Onex sold the fully leased, 560,000-square-foot retail mall beneath the towers to Blackstone Group for $400 million in 2015.

One site to watch is the thriving Macy’s at 136-50 Roosevelt Ave. In a transaction arranged by Colliers three years ago, the Chera family’s Crown Acquisitions bought a 99-year ground lease — valued at $1 billion over the term — on the 250,000-square-foot department store. (It’s the rare major area property that isn’t owned by Asian companies.) But several years remain on Macy’s lease.

Downtown Flushing is unique in New York. It isn’t picturesque. Most blockfronts are still lined with older, low-rise and sometimes shabby-looking buildings.

Yet, despite lacking a single marquee-name office tenant or new office building, it might be the city’s single most successful commercial district. The “retail malaise” seen elsewhere via space-to-lease signs is nonexistent. Although its office stock is hard to measure, real estate players say that it’s virtually full.

Unlike other thriving, outer-borough neighborhoods that resemble culturally flavored villages — like Russian Brighton Beach and Greek-and-polyglot Astoria — Flushing feels like a city unto itself.

With a population of 60,000 residents, 67 percent of whom are Asian, according to the city’s Department of Small Business Services, it’s a “city” that plays by its own rules.

The blocks around the Main Street No. 7 subway terminal boast the energy of Times Square without tourist hordes and LED lights. Trains and planes pump up the volume: The subway roars beneath Roosevelt Avenue; the LIRR glides in and out of the Flushing station one block west; LaGuardia-bound jets thunder overhead and seem to barely clear rooftops (though locals never look up).

Flushing’s concentration of Chinese, Korean and Vietnamese restaurants is unparalleled. The New World Mall is unlike any indoor shopping venue in the city; hundreds of merchants are spread over four levels that also house a vast food hall and three Las Vegas-scale restaurants.

But Flushing’s office scene is hard to quantify. Data on inventory and availability don’t show up in standard brokerage reports because nearly all of it’s in the form of commercial condominiums.

All the office condo space at downtown Flushing’s heavily promoted, half-dozen new projects — such as the 164,000 square feet at F&T’s Flushing Commons — add up to what might fit into a single Manhattan Class-A tower. But office condos are also spread over hundreds of smaller buildings nearby. Even Lee, an expert on the subject, declined to estimate a total beyond the roughly 1 million square feet in her company’s buildings.

There’s only one rare rental space up for grabs — a 20,000-square-foot office block at F&T’s Queens Crossing. But it’s only available because F&T, which has its own offices there, plans to move them to the firm’s rising Tangram complex nearby.

Except for commercial condo units that are part of mixed-use developments, “there hasn’t been any real office development in Flushing in 20 years,” says CBRE Queens specialist and executive managing director Roy Chipkin. He says F&T is offering the space at $75 per square foot — a number that would be “half the price” if it were a mile or two away.

“Every new development that goes up has a commercial component and it’s all presold at $1,300 a square foot,” Chipkin adds.

“People outside Flushing can’t comprehend it,” he chuckles. It’s the only place in the city where office condo prices are on par with apartment prices.

Colliers International’s Plotkin says the commercial real estate realm is “very heavily medical-driven.” Individual doctors and other health specialists occupy innumerable office condos as small as 2,000 square feet.

Flushing’s uniquely energized retail leasing scene is dominated by restaurants and food stores, banks, and both modern and traditional Asian pharmacies. (A jumbo Duane Reade next to the subway station is a big-name outlier).

Plotkin recently represented F&T at the nearly finished Flushing Commons, where famous Chinese hot pot restaurant chain HaiDiLao has leased 12,000 square feet on the second floor. He says the asking rent was $75 a square foot. At ground level, he adds, “we ask $160 a foot and get those numbers.” Retail vacancy in downtown Flushing is barely 1 percent.

Unusually, the rent for retail portions of new construction — most of which stands off of the main drags — lags behind older sidewalk-level storefronts at Flushing’s “epicenter” of Main Street and Roosevelt Avenue, Plotkin notes.

“The ask is typically between $275 and $350 a foot,” he says, “and landlords come pretty close to achieving those numbers.”

 

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