25 Aug SharkStreet Radio on 970AM TheAnswer: “The Queens (NYC) real estate market” August 2020
Bill Staniford 5:16
Good afternoon, New York. Happy Saturday, and welcome to this episode of SharkStreet we are blessed today we have, we have an excellent guest Michael Wang, Michael Wang is the founder of Project Queens actually Michael’s got a bunch of different titles and we’re gonna let him introduce himself. So…So Michael, you’ve been doing, you’ve been doing Project Queens you’re the co-chair of the Queens Chamber of Commerce and you’re also co-chair of AREEA?
Michael Wang 5:44
Correct, on the commercial division of AREEA East.
Bill Staniford 5:48
Okay, so So Michael, why don’t we just start, and so tell me, how is how have you been doing in Covid. How’s that been affecting you…personally?
Michael Wang 5:56
Personally personally. Personally, I think it’s affected me, like, it’s affected a lot of other people. I’m blessed to be able to go out my, my wife’s family lives in Long Island and they have a detached house which is, it’s nice
Bill Staniford 6:13
It’s nice to get out of the city to be able to get out of the city.
Michael Wang 6:14
Yeah, it’s much more roomy in my house in Queens right so we’re out there
Bill Staniford 6:19
That’s a huge thing I mean people are stuck in the city traffic. It’s insane. I feel I feel badly for everyone anyone that’s stuck in the city,
Michael Wang 6:26
so I don’t feel stuck. There’s cousins over there they play, you know we eat food we go to sleep. You know I’ve been blessed to not really feel any, um, aside from business like major effects in my family life and personal life.
Bill Staniford 6:38
Awesome. So, on a business perspective, you’ve been working on a project called Project Queens right and actually you know this show today we’re going to be talking all about Queens, this is the the main focus of the show is going to be about queens we’re going to do deep dive into all facets of the commercial industry commercial real estate in Queens and. So tell me about Project Queens so actually give us a little bit of background, professionally how you got to where you are right now, and then go into a little bit about project queens?
Michael Wang 7:07
Okay, um, long story short, I’m born and raised in Queens, New York. I went to school here I left for college a little bit and then now I’m back. Professionally, I’ve always wanted to do business, hop around a bunch of different business jobs, got into real estate at Douglas Elliman doing residential. I always wanted to do commercial but you can’t really just get into the commercial door straightaway
Bill Staniford 7:31
When were you in Douglas Elliman?
Michael Wang 7:32
seven years ago now.
Bill Staniford 7:33
So you were you were under Dottie Herman.
Michael Wang 7:35
Douglas Elliman is a big company.
Bill Staniford 7:37
Well, of course, she’s the CEO.
Michael Wang 7:39
Yeah, I’ve never actually probably been like in a one-mile radius of her But yeah, sure
Bill Staniford 7:43
Well okay I mean she you know obviously she does the show right before this one so
Michael Wang 7:47
That’s as close as I’m ever going to get to her
Bill Staniford 7:50
Okay, cool. And so how do you get it, how do you make the How do you make the jump from residential to commercial?
Michael Wang 7:56
I always wanted to commercial grow like…growing up in New York. You know, I wanted to be a businessman since I’m five years old, which is a caveat of New York, I guess. So I started do more, pushing towards more commercial deals with my contacts. And I ended up going to a company called Lean Associates which is a more like natural shop. I was there for a little bit and then in Queens, you know, there’s no real presence for commercial real estate. So, I felt like I wasn’t getting that much support for queens, per se, and if I’m going to just kind of trailblaze that I might as well make my own thing.
Bill Staniford 8:39
So what is Project Queens. And when did you start it?
Michael Wang 8:43
Project Queen’s official launch date is January 1 2020.
Bill Staniford 8:50
Michael Wang 8:51
I thought it was a great date to kind of put on the business card or whatnot.
Bill Staniford 8:54
Yeah, I mean an interesting year to start any new venture, no question about that.
Sure you weren’t planning for COVID but anyway
Michael Wang 9:03
yeah i think i posted something saying like we’re starting January 1 2020 launching into the new decade or something like that, and surprise So,
but Project Queens is a, we’ll call it a boutique commercial real estate company that focuses solely in Queens. We do a lot of leasing, and we’re very network and relationship based.
Bill Staniford 9:29
Okay. And so, and you’re also the co-chair you serve with we serve together at the Queens Chamber of Commerce and you’re the co-chair of real estate. I’m the co-chair of entrepreneurship and innovation, and so tell me sort of any initiatives, good opportunity to plug the Queen’s Chamber of Commerce. What are you guys working on over there?
Michael Wang 9:49
Well, the Queen’s Chamber of Commerce is really the best nonprofit. I’ve had the honor to be a part of. They provide more value to me than I could ever provide to them, and that’s not how all the nonprofit’s really work. So they have, as you mentioned, different member committees for you know your innovation, technology, I’m on real estate, there’s law there’s banking there’s arts and entertainment there’s all this different stuff. And they throw normally in person like 300 events a year. We’ve transfer that to Zoom. So it’s a great place to network do business be involved in the Queen’s community. So I highly suggest anyone interested in Queens to just, just go check out their website.
Bill Staniford 10:35
Yeah, I mean I was actually really interested in the Queen’s Chamber of Commerce because I felt like they were forward thinking, and they were open to trying new concepts and new ideas, obviously that was very compelling to me. Tell me about AREAA, and what you do. There were a lot of different hats. So…
Michael Wang 10:51
Yeah, um, AREAA is the Asian Real Estate Association of America, and they’re a national nonprofit focused on really real estate professionals throughout the nation that want to network with, I guess I mean, the Asian community. Um, and I’m part of the New York East chapter there’s a Manhattan chapter that’s really more bigger and official, New York, East goes towards queens and Long Island. So I serve as the commercial chair there, we throw events, educational stuff. And it’s also just a great networking, actually the AREAA events are usually very well attended and a lot of fun.
Bill Staniford 11:34
Yeah, no, listen, I mean I’ve actually spoken at a couple of AREAA events and it’s important for people to know that that the the Asian community is the fastest growing population in New York City. And, you know, certainly would like to see that continue and. And so, you know, I’d like to transition. Now just to sort of talking about at a high level, about Queens in general what are your thoughts are just about getting back to normalcy from COVID. Any just general thoughts on how queens is doing right now?
Michael Wang 12:08
Queens traditionally and historically rebounds faster than all most other parts of the nation including Manhattan, and it dips less, and if you go to a lot of the major hubs in Queens right now, Jamaica. Long Island City maybe not as much but Flushing for sure where my office is based. Even in Bayside, Bella Boulevard, there is Astoria, which is really hot now. You hear it in the news that aAstoria is having like block parties and a liquor license revoked because there’s just tons of people on the street.
Bill Staniford 12:45
How was queens affected by the hurricane just recently?
Michael Wang 12:47
Queens has a lot of trees.
Bill Staniford 12:49
Okay, so lots, lots of electricity lost for people in town..
Michael Wang 12:55
Lots of electricity lost lots of branches on cars and just blocking the road
Bill Staniford 12:57
Yeah, I mean I think you know it’s unfortunate we obviously we just went through the hurricane it was, I think there was a considerable amount of blackouts that were going on but generally speaking, not too much damage is that, that’s how I see it.
Michael Wang 13:14
Uhm, from what I saw you know I’m always very impressed by the speed that the city cleans things up I know there’s a lot of stuff on the news saying oh everyone’s slow and power outages but my experience is always that, you know…
Bill Staniford 13:24
I think the governor was looking into investigating Con Edison or something or maybe I just made that up and just because there was a slow response to the electricity but maybe that’s not Queens.
Michael Wang 13:32
I’m sure there’s people that are out of power and suffering, so I don’t want to say that that’s not the case. But it’s just not the case, you know, for me, I didn’t lose power in historically when I, whenever I do lose power comes back on like pretty quickly.
Bill Staniford 13:51
Okay so COVID…
Michael Wang 13:54
Bill Staniford 13:54
How are people how do you feel that people responding are recovering from COVID?
Michael Wang 13:55
I think the recovering Queens is going phenomenally well. And the reason why I say that is in a matte more macro view in New York I hit the hardest first right so maybe like in March
Bill Staniford 14:12
And I think in particular, Queens got hit the hardest is that corrector was it Brooklyn?
Michael Wang 14:16
Um, it was like Westchester parts of Manhattan, Queens, look, the virus originated in China. Right, right. So, in Flushing is like the central like point of like where Chinese people come in from China immigrate and in even Chinese people live there. It’s like the biggest Chinatown in America.
So I think the thought, automatically, even for me is like, Oh, it’s gonna come right like downstairs my office first you know I’m gonna be the first one to get it. I don’t think that’s, I don’t think that actually happened though, which is kind of strange right yeah but I think I’m not a scientist so
Bill Staniford 14:55
okay but so people, like you’re noticing people coming back to life you’re noticing people going back to work, foot traffic I think we were talking about that a little bit offline.
Michael Wang 15:06
Yeah. People are coming back to work and even with the news reports you know you never hear about New York anymore. So I think mentally, people are coming back on like a macro news level, but on like a more day to day. I live in Queens and need to just keep feeding my family and all that good stuff, Queens is made up of a lot of blue collar workers. A lot of immigrants. So, when a large population is built for off of that like profile. We really don’t have that many places to go. Right. A lot of people have a lot of their savings in their, in their first home, and that mortgage, so you can only shelter in place for so long, while the bills pile up. And now that we’ve kind of reached this you know reopening phase 1234. The traffic in like the subway stations. The traffic the foot traffic walking around in these like commercial transportation hubs in these commercial districts. Looks like how it was pre COVID.
Bill Staniford 16:21
I think besides the fact that people are wearing masks.
Michael Wang 16:24
Oh, yeah. Everyone’s wearing masks, I think in in Queens, a lot of people are wearing masks. That’s what I usually see right on lists for outdoor dining and things like that,
Bill Staniford 16:34
right but but think like this coming back to normal.
That’s what I’m hearing.
it’s not really coming back to normal here in New York, we talked in Manhattan. We talked about that only 9% of the people are coming back to the office and that’s, I mean, to me, we were that that’s a crazy number 9%.
Michael Wang 16:52
That’s a crazy number and I’m in Flushing Main Street I could say that as of, maybe the past couple of weeks, it literally looks like it did pre-COVID.
Bill Staniford 17:03
Okay, that’s, that’s awesome. And, I mean you were you were also telling me offline that you think that that flushing might be the highest traffic area in all of the country. Yeah, and that’s interesting. Okay, um, we’re, we’re going to be right back with some more SharkStreet after these messages.
Bill Staniford 19:43
And welcome back to SharkStreet we are here with Michael Wang from Project Queens and Mike right before the break we were talking about everything coming back to life in Queens, and how, you know, just something that’s super interesting. We’re talking about foot traffic right and everybody knows that sort of the major areas of foot traffic, not only in New York but the country right is Time Square. Grand Central Station and what you’re saying is now that New York is new Manhattan has taken such a hit and there’s, there’s only 9% of people that are actually coming back to the office that you actually believe that flushing is the foot traffic capital, or the has the greatest amount of foot traffic in the entire country right now is that is it. Am I saying, am I saying that correct?
Michael Wang 20:35
That’s 100% correct, Yeah, I’m flushing Main Street was the third most foot traffic intersection in New York City behind Time Square and Herald Square. And now that Time Square and Herald Square have, you know, very little foot traffic compared to what they used to. And that goes for all the different Main Streets kind of around the nation with flushing rebounding the way it is. It may literally be the number one most foot traffic the intersection in the entire country right now.
Bill Staniford 21:03
That’s amazing, Okay, so, so let’s get more specific about Queen so we’re gonna we’re going to try to break this break this up into different pieces so what I’d like to, I’d like to know if you can highlight different pockets of Queens different neighborhoods that you’re sort of super excited about and then we can talk about those specifically so. So right now, it can be self serving right so whatever you want to say whatever you think like, what do you consider to be sort of the hottest neighborhood that we should be aware of?
Michael Wang 21:31
Uhm, If we’re going to talk about hot queens neighborhoods, you have to speak about Jamaica. Okay, um, and the reason why Jamaica is hot and this is kind of the theme with all the surrounding boroughs and even the tri-state is proximity to Manhattan, via transportation. Correct. Right, so, Jamaica, is the last hub of the E & F lines, and a couple other lines subway lines,
Bill Staniford 22:02
Well, and also the LIR
Michael Wang 22:03
And the LIR is the Jamaica LIR hub is like a transfer hub into the different lines into Long Island,
Bill Staniford 22:10
And you can get to JFK
Michael Wang 22:11
And JFK is right there so for a million different reasons right Jamaica. Not only is the last and final stop in South Queens, which forces everyone beyond that to transfer through it. It’s going through major redevelopment initiatives with the city with possibly the state with local developers. So there’s major dollars going into the Jamaica redevelopment. And you can see a lot of new developments going up, you can see a lot of different, uhm, like parks being renovated and things like that. So, you can’t talk about Queens redevelopment without talking about Jamaica
Bill Staniford 22:53
Okay, you know, and so one of the, one of the interesting things that I find when I have these conversations with real estate professionals and we start talking about areas that are getting hot. It comes up to, with gentrification. So, you know, and we talked about this previously but, you know, in your mind, is, is, is this going to, are we going to go is Jamaica going to go through a period of gentrification here, if so what does that mean to you.
Michael Wang 23:19
Um, I think. So, I don’t want to get lost in the semantics, but let’s just assume gentrification is new buildings coming up, and people that may not have originally lived there. Now move in to the nicer buildings and are using usually in Queens and what we’re talking about using that subway system to now get to work because traditionally Manhattan is too expensive, something like that, right. So, when I hear of gentrification the negative points are usually that the prices are going up to high
Bill Staniford 23:56
Right, and we’re gonna price out the people that have been existing in that neighborhood, for a significant period of time, that’s I guess the negative connotation around gentrification,
Michael Wang 24:09
there’s that there’s like the existing local culture that kind of gets decimated and disappears.
Bill Staniford 24:18
It doesn’t get enhanced? It gets decimated?
Well, I mean I my personal opinion is that people just that have been born and raised in a neighborhood, they like their local deli because they’ve been going there for a long time, they like their local pub because it’s been there for a while. Is this good enough reason to not go in and invest dollars in a neighborhood? I mean, unless you just want to, how long do you want to keep it there like 100 years?
Bill Staniford 24:46
I don’t I don’t, I don’t, I have a hard time fundamentally understanding that this argument at all because, you know, I think the city and its in general and maybe even the population of the city itself needs to generate jobs and opportunities for people. And what better jobs and opportunities, can you get other than development, I mean those are great blue collar jobs construction jobs that brings in industry and, I mean, again, it’s, I think you have to have development in order to have a vibrant growing city so so let’s jump off of Jamaica, give me another one.
Michael Wang 25:22
I just want to follow up on that point real quick. So, um, when investment dollars go into a neighborhood, that’s generally a good thing. There’s two points I just want to just kind of flesh out here real quick. I’m sure there are some reasons like we just said why this argument even exists, but I think the fact of the matter is, a lot of the time when a new development goes up there’s a lot of pushback. And then the development gets built, and it’s like this nice retail first floor with a really nice residential building on top, and then five years later after the community just gets used to it, right, if you go to anybody in the community I’m literally and I’m very confident like 95% of these people and say hey would you rather like have this building disappear and put back what was there was a lot of the time, which is like really nothing like dilapidated buildings. Nobody says that they want to go back, sure to what it was…
Bill Staniford 26:17
I mean there’s also there’s almost like psychologically speaking there’s also this just fear of change, and anything that anything that you can’t see anything that’s unknown that could be potentially causing fear in people.
Michael Wang 26:30
And one more thing about that topic is when you look at LIC and Flushing in a lot of these areas where the prices are going up. That’s a big argument to say hey look, you know everyone’s getting pushed out, but me as a real estate professional in Queens, if you look at every neighborhood. It doesn’t matter what it is, if you go into Long Island if you go into Suffolk, where there’s no density. Right. Prices across the board, have been going up. In some cases the housing in Suffolk, where there’s no like so called gentrification has gone up more than the city areas. So, I think pinpointing the price change in one location based on like singular argument and singular like project ignores the fact that this is happening on a macro level.
Bill Staniford 27:10
Yeah, I mean, I’m, I’m a true believer in supply and demand because I believe that it’s the law of supply and demand it’s not the theory of supply and demand I think that we need to create, if, if the goal right if we sat here and decided that the goal. Overall was to create more affordable housing, then you would need to increase the supply and that would be the only way that you’re able to make prices go down. That’s, that’s my belief. Now, you know other people argue against that saying that, you know, cream, just creates more demand, which more and more people are going to come into the space. And so, you know, the prices are not going to go down substantially because demand will rise and I said okay, but that means more people want to live here isn’t that a good thing. and then I guess that pushes the pressure on transportation and other types of things that that to create amenities. So let’s see if we could Can we talk about Long Island City and the Hunters Point area right because I know that there’s been a great deal of development, pre-COVID, right, and this would there was obviously Amazon was going to come in there. What’s going on with that area I find that a fascinating area?
Michael Wang 28:19
So, Long Island City is really amazing. It basically has its own skyline now. Hunters Point is, I believe the largest by square footage an acreage project under construction right now in the entire New York City, something like 5000 residential units. And, and to this point. I believe that when all the units come online prices are going to drop.
Bill Staniford 28:46
I would think so.
Michael Wang 28:49
They do. And this happens in other neighborhoods.
Bill Staniford 28:51
And I also think it’s important to point out that, you know, during the COVID crisis, our people. And, you know, we’re going to have a break here in a little bit so you can you can think about this but I’m going to pose the question. Is it because of COVID are people reevaluating the deal, that is structured of living in a city right because you you choose to live in the city because you have all these amenities executives cities, culture, restaurants. Now, with COVID, you have this other bargain in there that you may be exposed to different viruses and I personally don’t think it’s going to be an issue long term but maybe, maybe you think differently, and we’re going to follow that up. We’ll be right back with some more right shark street after these messages.
Bill Staniford 33:08
Welcome back to shark Street, we are here with Michael Lang from Project Queens and Mike right before the break we were getting into that we’re talking specifically about Queens. And one of the things that I am, what I love about Queens is the diversity of the city itself right so of the borough of Queens and there is, we were talking about Jamaica. We’ve been talking about Long Island City, Hunters Point, but there’s there’s many different areas, Queens we have high density we’ve got commercial we have two airports we’ve got lots of single-family SFR single-family residents everywhere. One of the things that I love about queens is the diversity.
Michael Wang 0:40
Yeah, I mean Queens is known for its diversity, and I could be in any neighborhood and it feels like I’m going to, if you want to feel that way you’re in a different country with the food, the language, I think we have like 250 languages spoken Queens is like the most right in the world in the world. Yeah, absolutely. And you really get to understand the culture by really just ordering food going through local deli standing next to the people on the bus and hearing them speak, and it’s, it’s just the most diverse place on the planet the wonderful thing.
Bill Staniford 34:25
You know, and I’m gonna give a plug to Flushing because I go, I go to Flushing fairly regularly, it is, it’s an amazing place. It’s really an amazing place and people, people should if they haven’t been to Flushing in a while you should go, you should check it out. It is unlike anything that you’ve seen in Manhattan or other places i mean it’s it’s simply awesome
Michael Wang 34:36
Flushing is now the largest Chinatown in the United States. And the amazing thing about that is the Chinatown that you usually go to traditionally like just a single or two-story streets kind of run-down Flushing is all brand new, and it’s getting more and more new.
Bill Staniford 35:02
I mean flushing has to be the largest Chinatown outside of China?
Michael Wang 35:07
Bill Staniford 35:08
I mean, maybe I’m maybe I’m wrong and certainly in the United States.
Michael Wang 35:11
There’s Chinese people that come over to immigrate, and they land in Flushing they get off at JFK, they take Uber to Flushing, they get out, and they’re like, I thought I left China, like in my in America?
Bill Staniford 35:22
So, so one of the things that, you know, I’d like to talk about briefly and then we’re gonna get into the different verticals is just a little bit about coastal resiliency of balance on the environment, I mean we have both of our airports in New York are in Queens, that’s JFK and LaGuardia both of those airports are on the water, uhm, are we vulnerable?
Michael Wang 35:50
From what I know there’s coastal resiliency efforts. There’s new standards, so I’m not an expert this but I do know a little bit. There’s new standards just like there’s LEED certification for buildings. Now there’s certifications for your coastal resiliency efforts. Um, it’s very attractive for people to build on a waterfront for all the obvious reasons, and in Queens there’s a lot of like a dilapidated waterfront. Traditionally, these were warehouse areas meant for shipping. Over the decades, a lot of sludge, a lot of nasty stuff has been dumped in there. Growing up in New York you hear like stories of, like, three-eyed fish in the Hudson River. And it’s true, because you go by and it smells bad. Now, along with every proposal for a new development comes with the environmental. What are you going to do with the waterways, people want to kayak and stuff. So it is definitely something that’s building in momentum and I think rightfully so.
Bill Staniford 36:47
Yeah i mean i think that there’s a massive opportunity to do something great with the waterways around New York City as we become cleaner in general, because a lot of this stuff takes money, right. So, I mean, you know, again we’re gonna need ways to fund this and how, how are you going to fund these types of projects, these, you know, green projects with app development, because that’s where the money is going to come from. Okay, so let’s let’s get into the different verticals of real estate on the commercial side and we’ll start off tackling retail which I know is an area of expertise for you. And so, you know, I think, obviously, the Internet has completely disrupted retail, in general, but, and, and even to the point of restaurants that are now, delivering foods, but this is all going to come back, I believe, I believe we’re all going to come back to normal at some point, but just in general if you can give sort of a high level overview of the retail market. What’s happening that’d be great.
Michael Wang 37:51
So I think because of the density of Queens and like the blue-collar stickiness of the people, the retail in Queens has been doing phenomenally well compared to its peers. If you go into Midtown Manhattan, there’s a lot of stores that open and things like that but there’s very little vacancy in Queens for retails particularly on the main streets. And that doesn’t mean it’s the same tenants in there, a lot of them are the same tenants because it’s that core queens product which is your local travel agent, attorney, a bank, a bodega a beauty store. A haircutting place, these are the things that the local populace needs, so they stay there. And then there’s the shift with…
Bill Staniford 38:38
But, they also live there, and I think that’s, that’s the that’s the critical point right so if you’re in midtown Manhattan, the people that frequent those retail locations, don’t necessarily live there they could live in New Jersey, they could just be coming into work. In the case of Queens, these are the local people that actually live in work in that neighborhood right?
Michael Wang 38:56
And, in the Manhattan along the people that live here have the means to go somewhere else during a pandemic like COVID, but in Queens.
Everyone just has not much. In general, is to go up and stays within their own like proximity, and it gets to a point where you need a haircut, you still need to get food in you still need to go out, people are working in Queens. They’re out and about…
Bill Staniford 39:20
I need a haircut.
It’s been a while I actually haven’t had a haircut, since we since we locked down,
Michael Wang 39:26
You do still look good.
Bill Staniford 39:27
Sorry, I’ll get that done, but so the mix of the retail, is that has that been in fact impacted.
Michael Wang 39:35
Yeah, so soon because you have that core product, it may not be so noticeable. But the impact with the Amazon and the technology has already been happening. So your big box stores.
I call it the double whammy right you have Amazon and then COVID anything, for whatever reason, gets hits by the double whammy is in big trouble. But then you have the stores that have done well during COVID. So you kind of replace some stores with some newer stores
Bill Staniford 40:04
What stores have done well during COVID?
Michael Wang 40:08
Um, so I’ll go from top-down. So, certain national companies have done well during COVID for whatever reason and they’re still in expansion mode, and they’re actually looking in like deal making mode and then when you break that down to the smaller ones. Now you have like food delivery.
These delivery concept these like commercial kitchens.
Things like this are now coming to light and the offers for when we’re dealing with leases, and also at the same time
Bill Staniford 40:40
So talk to me about the commercial kitchens, this is something that I’m fascinated by so commercial kitchens, they’re not restaurants, they are simply kitchens that feed the population through delivery. Is that correct? I just want to get that right.
Michael Wang 40:54
They’re not branded sit down restaurants, they focus on like box to meal delivery.
Bill Staniford 41:00
Right. Okay, and so but those types of restaurants, I call them restaurants right they’re mostly delivery restaurants, they don’t necessarily need the, the best locations right? right on the avenues that wouldn’t make sense.
Michael Wang 41:17
Bill Staniford 41:18
So they can go to, you know, be tier properties or…
Michael Wang 41:22
I think the crux of what I’m saying is that there’s certain companies that have done so well during COVID, they’re in an expansion mode. So the price per dollar is not necessarily the main thing they need to execute quickly. Um, so any type of, you know, entrepreneurial adjustments that people made during COVID to bring them success are all apparent in like the real estate market in terms of finding new space, and things like that.
Bill Staniford 41:50
And what about office?
Michael Wang 41:55
Office in Queens is probably the worst faring segment. But again, compared to his peers, that’s like not as bad as we said the 90% number for Manhattan. But yeah office is tough, we can expect you know anywhere from four to eight months of vacancy on a turnover of a tenant
Bill Staniford 42:12
Right so one of the things that I find fascinating about office and and what COVID is done, and as, as the CEO of obviously Rentigo, my own company, is that COVID basically forced executives to evaluate how well their team performs virtually. Right. And with, with all the new technologies that are available that we can run office meetings and conduct business somewhat normally. It really gives you this opportunity to evaluate your teams to see who’s being productive within this sort of virtual environment. And quite frankly, I found that most people are equally as effective, and that’s a that’s a problem for office, I think in general, I think you’ve seen some announcement from some of the larger companies like Google, for example, that said that they don’t really ever plan on bringing their employees back into the office, do you do see that happening out in Queens is that a driver here?
Michael Wang 43:16
So I think queens is ready for a huge influx even in office. And, and this may be a year or two down the line but what’s going on with queens again, it really runs back to the same theme of the core constituent of the population is very sticky.
You have a lot of vacant, once you get to like the national higher corporate level institutional level. They’re really like stuck in the mud in terms of decision making of can we bring people back and having all this legal. Decisions, decisions with partners, board members. In Queens you don’t have that like level of business. So decisions are made quicker. And that’s why more people are back to the office, they’re like, local lawyers with maybe 5000 square feet would be huge. You know right now anyone with a 3000 square foot office that’s like a pretty substantial office size, and it’s made up of pockets of very small offices, but then at the same time, like I said, there’s going to be a wave coming. Is that what we see now with the Office leasing and even with the residential, is that, at least for now a lot of people want to get out of the city. Because they don’t feel like they need to be here. It’s pretty vacant.
Bill Staniford 44:22
Bring you’re saying the city you’re talking about…
Michael Wang 44:23
I’m sorry yeah Manhattan. Okay. And there’s a lot of inquiries inbound going saying, I want to be maybe across the river where it’s much cheaper relatively, right, so there may be an influx of this kind of Office tenant as well.
Bill Staniford 44:36
Okay so hold that thought, and we’re going to be right back with some more. SharkStreet after these messages.Bill Staniford 13:07
And welcome back to shark Street, we’re here with Michael Wang from project queens, and I’d, I’d like to give a shout out for next week we’re going to be bringing on Peter Auerbach from Auerbach Funds and we’re going to spend a lot of time talking about investments in multifamily properties and. And so the entire market sort of nationally which would be really interesting. But Michael right before the break we were talking about office and one thing, we just need to follow up to sort of end it is, is what’s happening with the co-working spaces. And I find this, I shouldn’t be laughing I mean it’s it’s it’s not it’s not funny, and you know there’s. there are huge companies that are absolutely getting just destroyed, I don’t know how else to say it because we work, obviously, even before COVID was going through some pretty significant issues but Knotel is another one that I think is not faring very well. And I just feel like I mean there was this entire cottage industry of these coworking I still actually fundamentally believe in the underlying business, especially when you’re dealing with startups which I do, and you know startups want the flexibility to grow and contract regularly, but it really shows a very strong weakness in this industry in general. And I think it plays to the strengths of the property owners and not to the brands of these co-working companies but again this is going to play out over a significant period of time but just, you know, briefly in Queens particular, what have you seen or heard from the co-working spaces.
Michael Wang 48:00
Well, I believe, co-working is also one of those double-whammys right where you had all the WeWork in before. and then COVID on top, which in, you know, from a from perspective just looking, seems like it’s getting decimated. Queens, the reason why I don’t know so much about it is that the coworking space, never really made it to Queens yet.
Bill Staniford 48:23
Right, well there was a Long Island City, we were looking…
Michael Wang 48:24
For the exception right of Long Island City. WeWork is there and you have all the other brands there with with the branched off to Long Island City, but you go to any other neighborhood within Queens, the coworking space just hasn’t got there yet and we’ve we’re pushing to kind of expand into it because it made so much sense. But I don’t think anymore.
Bill Staniford 48:43
Okay, so, you know, Queens probably dodged a bullet there.
Michael Wang 48:48
Bill Staniford 48:49
Okay, well that’s good. So now, you know, let’s pivot into the multifamily space, let’s talk about, uhm, Let’s talk about rentals let’s talk about homeownership. And, you know, I believe. First of all, I, you know, one of the areas that have been most of decimated in New York City, New York City was is was the tourist hotspot of the world. Right? I mean they have that and think about all the industries that fed off of the tourism, whether it’s the entertainment space, or the, the restaurants that entire. It’s just a massive amount of people that were serving that industry, I’m assuming a large percentage of those people that were serving those industries lived in Queens?
Michael Wang 49:38
It’s very possible I don’t have the answer to that particular question, but what you see in the residential let’s go for rentals let’s say rentals… what you see in the rental space is that there was very little credit default within queens during the whole COVID. And a lot of that was dealmaking, but at the same time I think the decline in the, going to the office, actually benefited the residential sector, because now people are working from home and are using that, with more value, I guess.
Bill Staniford 50:06
Well, that may be, but there’s going to be I can almost guarantee that there’s going to be a wave of foreclosures that are coming and there I think, I think the government, the federal government in particular has done a fairly good job of staving that off by supplying additional funds directly to the people so that they can pay their mortgage so that they can pay their rent. And I think that the governor of New York, no matter how much I disagree with him on most issues, I think, has enabled people to stay inside their homes.
I don’t think that’s going to continue I don’t think it’s capable of it continuing first of all I think there’s been a budget hole blown in our in the New York State Budget unlike anything we’ve ever seen before. And I think this is going to be devastating. I do think that there is going to be a reckoning coming, and you know I’m just I’m just wondering, but you seem to think right now at least that the multifamily space is holding up well.
Michael Wang 51:05
Well, I’ll break down the multi-families soon but I just want to point this out real quick that I’m very bullish on Queens pre COVID because I feel like it’s like the next Brooklyn. And for a lot of reasons, even after COVID with the, with the with the like migration of people from Manhattan going into Queens. It’s a really good thing for Queens. But I don’t want to sound overly optimistic because there are some big questions that still loom from the pandemic. One is the foreclosures. Yeah, schools aren’t opening in February.
Bill Staniford 51:33
Well, I think they are
Michael Wang 51.33
well you think , well, I don’t know.
Bill Staniford 51:36
Well, I mean, I think, I think the governor just announced yesterday that the schools are opening.
Michael Wang 51:38
So, but these are still questions that are detached out even with the families and stuff too though, and dining was supposed to be open in phase four, there’s still no indoor dining malls are supposed to be open Queens Center Mall the biggest most highly trafficked mall in like maybe America, it’s in the heart of Queens is still not open. So there’s. We’re not out of this yet.
Bill Staniford 52:01
Yet again, I want to be very clear so if I come across as pessimistic, I’m not. Right, and so the thing about real estate is that it can go up, it can go down there’s opportunities in both directions, right, if things are hot there’s opportunities to sell things are cool there’s opportunities to buy, and I fundamentally agree with you and I, I’m bullish on New York State, long term New York City long term incredibly bullish, I think, and because I was born here. I know what we’ve been through, I know we’ve been through worse than this and I know that we’re resilient people. And you know, I think Queens, in particular, I think it’s, it’s a place that is super diverse super interesting and is going to be good, long term.I don’t know what are your thoughts?
Michael Wang 52:49
I like to think people in Queens are very reasonable because, because they put in work, and there’s something about putting in work that makes you just see things clearly.
If you want a big discount in Queens, you’re not going to get it.
I think the big question that everyone’s asking me around the nation maybe around the world, is it can I buy something for cheap.And, you may be able to do that somewhere else but in Queens, you’re looking at modest like 10 to 15% discounts right now. Bill Staniford 53:12
Michael Wang 53:12
Bill Staniford 53:13
We you know, again, super interesting because in the suburbs, right out Long Island prices are going through the roof. And, and so is Queen sort of that tweener where you’re not really out there, in, in the suburbs, but you’re not also right in the middle of it.
Michael Wang 53:32
Um, I think it’s a little different. Actually, the suburbs are going up, because of this volume from Manhattan leaving right they’re going to somewhere, you know, detached house with a garden, they’re not going to Queens. The Queens’ product is that core retail in the bottom two units on top mixed-use kind of thing. And I think what you see now for like the moderately priced like maybe under 20 million to, let’s say 2 million to $20 million properties. What you see right now is that 10 to 15% discount. Because you see, the people that have that can decide what to do with their money. Like, families and in family shops have real estate generational shops. They see a product where they would have purchased maybe a year ago at a modest like 10 to 15% discount, and they’re thinking long term, maybe 10 years maybe 30 years maybe they’ll be thinking generationally down the line that they’re willing to pick this up. So in between the the the previous market price and the hope of getting like this 25-40% discount is a huge layer of capital of working class families that want to purchase their first property as an investment and these real estate families and smaller companies that can’t that don’t have to go through board approvals that don’t have to go through these things, and are willing to pick up these properties for the long term, where you do see a little delay and kind of a lag is 20 million plus. And this is because this is usually fed off of like institutional investors.
Bill Staniford 55:09
Sure, and I actually believe that there’s a lot of frozen capital right now at that level they just because they’re concerned, right, and there’s their people don’t operate well in ambiguity. But, so if there was, let’s say family offices or maybe first time investor in a multi family property. What are you advising them where should they be looking, if you’re talking about Queens specifically.?
Michael Wang 55:33
Hmm, that’s um, that’s a, that’s an interesting question because there’s a lot of different pockets in Queens that are very interesting. Um, I would go with, you know, a very traditional thought process of, where are the developments coming up the major developments. So, Long Island City, obviously, is one Flushing has been booming but it’s maybe overbuilt a little bit, but I’m talking about like the surrounding areas of it, because you’re not going to get anything like on Main and Main, as, as one of these, you know family own shops and things. There’s just too expensive, but everything around it, which is has like maybe like a 40 by 100 or like 50 by 100 footprint, a lot lot size. You know those are purchasable. Um, so, so you have…
Bill Staniford 56:20
What are your thoughts on Far Rockaway, and I’ll tell you it’s just one of these areas that people have been talking about in real estate since I can remember back in the early 2000s people were talking about, How Far Rockaway is going to be the up and comer whatever. And now, because you do if you’re living on Far Rockaway you have access to the beaches, which I think is is pretty interesting, especially in this state and but I don’t hear anything about it. What do you have anything on Far Rockaway?
Michael Wang 56:48
I’m gonna blast through all of this real quick. Okay. Far Rockaway last stop on the F, I believe, right, transportation, beaches. Were, mind you, the whole queens is in proximity in proximity to Manhattan right so there you got Far Rockaway Jamaica we talked about that Flushing as the highest foot traffic in the whole world. Right. Long Island City right across Midtown, then you have Astoria which has like Kaufman studios building like one like two point something billion dollar developments, all of these different areas are up and coming. So, yeah, I think Queens, I’m very bullish on Queens, in, in general, and if I would say, what’s a good play right now. What I’m doing as a real estate professional is cherry picking both sides, right. So, if you’re someone that can make a unilateral decision to deploy the capital.
And you see some a good deal. Go for it.
Bill Staniford 57:41
Okay, so before we let you go, and I want to thank you for coming in, Michael, can you tell the audience how they can get in touch with you contact information.
Michael Wang 57:49
Um, I got a YouTube channel just search Project Queens. It’s over there. www.projectqueens.com is my website, and Instagram. I think I’m MichaelProjectQueens
Bill Staniford 58:01
We’ll make sure you get it correct
Michael Wang 58:05
it is MichaelProject,Queens on Instagram.
Bill Staniford 58:07
Okay, great. And so, So Michael, again, I want to thank you for being in today and it was great, awesome talking about Queens the borough that I love so much. And you know it’s it’s a fascinating place hugely diverse. We’re definitely going to check in with you probably on a quarterly basis to make sure we know what’s happening out there. And I want to thank everyone out there for for listening in on SharkStreet and enjoy the rest of your weekend.