Why are we hearing a buzz about the possibility of increased rental fees and property prices in New York recently? Well, we could point it to the fact that two global technology companies have announced their expansion to the city. The first is Amazon which has claimed to be establishing its second headquarters in Long Island City. The second and most recent is Google which is said to be building its New York HQ in around 1.7 million square feet of space in Hudson Street and Washington Street.
Shall this be a concern for tenants that their existing rental arrangements would suddenly experience a surge in prices because of this new development in the area? Shall property buyers expect a significant increase in the sales price of condominiums?
According to Mark Chin, the CEO of KWNYC Tribeca, the announcement of Google’s expansion in the city is a clear validation that New York City will gain so much from it. Since the real estate industry is characterized by too much uncertainty, its future could be ascertained with the help of the economic development coming from Google’s expansion.
If we will carefully look into the statistics related to Long Island City’s realty industry and Amazon’s expansion, we can see a positive correlation between the two. Just a few months before Amazon announced the establishment of its second headquarters, property developers and owners were seen to be struggling from the insufficiency of buyers and tenants in the area. But right after Amazon made the announcement, we were surprised by the significant growth of buyer interest and lease prices in the Long Island properties.
Will the properties around Hudson Square also demand over 20% increase in rental fees and sales prices? That we cannot answer for now. But we can look into the current status and the projected developments in the area to better assess the possibility of price hikes.
Today, the average price of a one-bedroom unit in Hudson Square is around $1.4 million while the rental fee is about $3995. However, we have to note that Manhattan has actually been experiencing a trend of rental concessions for the last 42 months. If we will take this into consideration along with the increasing property developments and residential building constructions in the area, then we can assert that realty companies and landlords would certainly love to be getting more demands for their properties.
Again, the future of real estate prices may still be unpredictable, but we can fully assert that rental rates and property prices will not magically go skyhigh in a blink of an eye. Google’s expansion wouldn’t fully bloom in a year. The development of other businesses in the area would take time, a decade perhaps.
Apart from the property prices, what else shall we look forward to in the upcoming expansion of Google?
Google is recognized for leading a responsible development that also increases the quality of residential living in their area of operations. Just like what happened after Google built its headquarters in Chelsea, we noticed a wonderful improvement in their neighborhood including the renovation of transport terminals, the establishment of wider sidewalks, the construction of protected bike lanes, and the planting of more trees. If the same thing would happen to their expansion to Hudson Street, then we could be expecting the outpour of Google grants that would ultimately benefit NYC residents.