Timing is everything in e-commerce. It is also critical for developers building fulfillment facilities for New Yorkers’ e-commerce orders.
San Francisco-based real estate investment trust Prologis picked a good time (Thursday) to file plans for a more than 500,000-square-foot warehouse at 12-18 38th Avenue in Long Island City. The Adams administration is on the verge of overhauling the rules around last-mile facilities, which sort and deliver online orders, in a change that would drive up the cost and timelines for such projects.
A spokesperson for Prologis said the timing of its filing was not swayed by looming regulatory change. A happy coincidence, then? Do those happen in real estate?
Serendipitous or not, the timing means Prologis likely won’t have to jump through additional hoops to build its facility. We can expect more such plans being filed in the next few months, as developers hope to squeak through before the city restricts construction of these facilities.
The Adams administration is pursuing a zoning text amendment that would require developers of facilities 50,000 square feet or larger to first secure a special permit, meaning that the projects must go through the months-long land-use review process. If approved, City Council members will have the final say over these projects being built in their districts. Generally speaking, you don’t win a lot of points with constituents for approving this kind of project.
Demand for industrial space cooled at the end of last year, with the availability rate hitting 8.9 percent in the fourth quarter (compared to 6.9 percent at the same time in 2023), according to the February report by Colliers. Last year, 3.2 million square feet of new industrial space was built.
When the city required special permits for hotels, it slowed new hotel development to a trickle. The same could happen to last-mile facilities, though the city is predicting only a slight drop in construction of the projects. A lack of new supply could drive up the value of the existing facilities.
Prologis purchased the site from TF Cornerstone in 2021, paying $35 million. A spokesperson for the firm wouldn’t say if it has secured an anchor tenant for the project. Prologis has worked extensively with Amazon, leasing space to the e-commerce giant across at least 19 markets.
What we’re thinking about: Do you have whiplash after this week? How are you thinking about the paused tariffs? What effect will the change of course have on home sales? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Friday marked New York’s 11th Craft Beer Day. Per a press release from Gov. Kathy Hochul’s office, New York is the second-largest craft beer market in the U.S. (though this appears to be based on the number of breweries rather than economic impact). New York is home to more than 500 independent craft breweries, which generate a $4.8 billion economic impact across the state, according to the governor’s office.
Elsewhere in New York…
— New York, under then-Gov. Andrew Cuomo’s direction, spent $452 million on medical equipment during the pandemic but only distributed three (yes, you read that right) of the nearly 250,000 items, Gothamist reports, detailing a new report by state Comptroller Thomas DiNapoli. The items included ventilators, oxygen tanks and X-ray machines. A spokesperson for Cuomo said that far more equipment was distributed than reflected in the comptroller’s report. “It’s good news that we didn’t have to distribute all these ventilators,” the spokesperson, Rich Azzopardi, said. “That means the hospital systems didn’t need them because people weren’t getting infected at the numbers that every projection said, because New Yorkers work together and they listened.”
— City Council Speaker Adrienne Adams removed Council members Selvena Brooks-Powers and Lynn Schulman from the Council’s budget negotiating team after the members endorsed Cuomo in his run for mayor, City & State reports. A spokesperson for the speaker indicated that the change was made after “members of council leadership lost confidence that these members shared their values.”
— Some Council members are calling for a ban on nonessential helicopter flights after a crash on Thursday killed six people, Spectrum News reports. Mayor Eric Adams, however, stressed the need to focus on safety rather than banning tourist flights.
Closing Time
Residential: The priciest residential sale Friday was $6.5 million for a condo unit at 10 Sullivan Street. The Soho condo unit is 2,700 square feet and last sold on the market for $6.5 million in 2016. CORE Group’s Emily Beare, Lexi Alper and Beth Doud Tomashoff have the listing.
Commercial: The most expensive commercial closing of the day was $16.7 million for 391-399 Sixth Avenue. The trio of commercial real estate totals over 8,000 square feet of lot area.
New to the Market: The highest price for a residential property hitting the market was $11 million for a condo unit at 166 Perry Street. The West Village condo is 4,500 square feet. Compass’s HLH + Partners Team has the listing.
Breaking Ground: The largest new building application filed was for a 79,815-square-foot, nine-story, mixed-use building at 138 Osborn Street. Boaz Golani of Boaz M. Golani Architect is the applicant of record.
— Joseph Jungermann