{"id":1004288300,"date":"2018-12-26T07:09:36","date_gmt":"2018-12-26T15:09:36","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004288300"},"modified":"2019-05-19T23:32:14","modified_gmt":"2019-05-20T07:32:14","slug":"one-court-square-in-long-island-city-1st-big-winner-of-amazon-move","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/one-court-square-in-long-island-city-1st-big-winner-of-amazon-move\/","title":{"rendered":"Long Island City Tower 1st Big Winner of Amazon Move"},"content":{"rendered":"
\"\"

One Court Square<\/p><\/div>\n

Global credit rating agency DBRS Inc. has been monitoring One Court Square<\/a> since earlier this year when Citigroup, the sole tenant of the 50-story, 1.5 million-square-foot Class A office building  in Long Island City, Queens, announced it was moving most of its employees out and vacating 1 million square feet.<\/p>\n

The firm was concerned about the CMBS implications of the Citi announcement as One Court Square is the largest loan in the DBRS-rated Wells Fargo Commercial Mortgage Trust 2015-NXS3 pool and backs a $315 million pari passu loan securitized in the transaction as well as non DBRS-rated Wells Fargo Commercial Mortgage Trust 2015-NXS4, Wells Fargo Commercial Mortgage Trust 2016-NXS5 and Citigroup Commercial Mortgage Trust 2016-P3 transactions.<\/p>\n

Then came another announcement. In November, Amazon said it had completed its search for a second headquarters and decided to set up two East Coast HQ2s<\/a>, one in Long Island City and a second in Crystal City, Va., beginning in 2019. The two regions will get at least 25,000 jobs each. Savana, owner of the iconic One Court Square tower, confirmed it was leasing the 1 million square feet of space Citi will be vacating to Amazon for the first phase of its move to Long Island City. It\u2019s not clear how long the lease will be but Amazon plans to invest about $2.5 billion<\/a> and create 4 million square feet of commercial space and possibly as much as 8 million.<\/p>\n

\u201cOne Court Square is clearly the most immediate benefit to Long Island City from Amazon\u2019s announcement,\u201d<\/em> Ed Dittmer, senior vice president, North American CMBS, at DBRS, told Commercial Property Executive<\/em>. Dittmer is one of several authors of a new DBRS report on the impact of Amazon\u2019s HQ2 announcement on Long Island City and One Court Square.<\/p>\n

\u201cWhen Citi decided to vacate its space at the end of its lease, DBRS obviously had some concerns. But we were also confident that the property could recover because Long Island City has been growing. The large block of vacant space benefits Amazon as well since it doesn\u2019t have to split its employees across several buildings while it builds its new site,\u201d<\/em> Dittmer added.<\/p>\n

DBRS noted in its report, \u201cHow One Court Square Won Big with Amazon\u2019s HQ2 Bid,\u201d the appeal of the property was not a surprise. It\u2019s the tallest building in New York state outside Manhattan and \u201cis one of 22 Class A office properties within the Long Island City submarket with a superior location within one block of five public parking garages and direct access to One Court station, part of the New York City subway system, beneath the building.\u201d<\/em><\/p>\n

Amazon plans to build its new corporate campus on a combination of publicly and privately owned sites approximately one mile west of One Court Square on the East River waterfront.<\/p>\n

More Development Anticipated <\/strong><\/h2>\n

\u201cOver the long term, I think we can expect those benefits to start spreading throughout Long Island City and further into Queens. Housing costs in other parts of the borough are relatively low compared with LIC and Manhattan, and there will be opportunities to improve the existing housing stock and increase the number of units,\u201d<\/em> Dittmer said. \u201cI also think you will see additional job growth over and above what Amazon itself creates. We could see new tech startups that want to be near Amazon or are founded by Amazon employees that strike out on their own. New businesses will have to open to serve the needs of these new residents and those will create additional jobs as well. Because transit to and from Long Island City will be critical, areas near subway stations may see the most change over the next few years.\u201d<\/em><\/p>\n

The report notes Long Island City has already been experiencing a multifamily development boom with more than 11,000 units added since 2010. The average vacancy rate has been about 4.5 percent over the past five years and rents have an increased an average of 15 percent. More than 5,600 additional units, mostly Class A with top-tier rents, are expected to be added by 2022.<\/p>\n

While certainly the largest office property in the submarket, One Court Square, will soon have company. Two office developments, One Jackson and Three Jackson, with a total of 1.1 million square feet are set to be completed by January 2019. They will be located less than one mile northeast of One Court Square.<\/p>\n

Many of the submarket\u2019s industrial properties have recently been demolished or repurposed, often because the developable land was worth more than the industrial property. This has led to more than 1 million square feet of industrial supply taken offline since then end of 2013 and resulted in a current vacancy rate of 5.2 percent.<\/p>\n

The DBRS report notes more demolition or repurposing of existing commercial real estate properties will continue as Amazon HQ2 is constructed. Amazon, which is eligible for state and city incentives valued up to $2.5 billion, will also be required to create spaces for public use, including a new primary\/intermediate school, nearly 150,000 square feet of public open space and 25,000 square feet of community facilities and artist workspaces.<\/p>\n

\u201cThe proposed development plans will fuel the continuous growth of Long Island City and benefit a majority of CRE owners for generations to come,\u201d<\/em> the DBRS report concluded.<\/p>\n","protected":false},"excerpt":{"rendered":"

A report by global credit rating agency DBRS looks at the impact on CMBS and other commercial real estate implications of the e-commerce giant’s decision to locate one of its HQ2 sites in the submarket. <\/p>\n","protected":false},"author":1068,"featured_media":1004288330,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21781,21808,21825,21783,1600,21742,21747],"tags":[37482,43523,44159],"class_list":["post-1004288300","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-real-estate","category-featured","category-finance","category-investment","category-new-york","category-latest","category-office","tag-amazon","tag-dbrs","tag-hq2"],"acf":[],"yoast_head":"\nLong Island City Tower 1st Big Winner of Amazon Move - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/one-court-square-in-long-island-city-1st-big-winner-of-amazon-move\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Long Island City Tower 1st Big Winner of Amazon Move\" \/>\n<meta property=\"og:description\" content=\"A report by global credit rating agency DBRS looks at the impact on CMBS and other commercial real estate implications of the e-commerce giant's decision to locate one of its HQ2 sites in the submarket.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/one-court-square-in-long-island-city-1st-big-winner-of-amazon-move\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2018-12-26T15:09:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-05-20T07:32:14+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/12\/One-Court-Square.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"250\" \/>\n\t<meta property=\"og:image:height\" content=\"194\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/one-court-square-in-long-island-city-1st-big-winner-of-amazon-move\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/one-court-square-in-long-island-city-1st-big-winner-of-amazon-move\/\",\"name\":\"Long Island City Tower 1st Big Winner of Amazon Move - 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