Real Estate

NY real estate brokers were banking on the 'Amazon Effect'

Amazon cancels plans for HQ2 in Queens

(CNN) - Amazon's sudden decision to cancel its HQ2 plans for Long Island City has dealt a big blow to the area's real estate agents, who were seeing an influx of eager buyers to the area.

Local brokers experienced an incredible buying craze after the e-commerce giant's November announcement that it would build a second headquarters in the Queens borough of New York City.

The so-called Amazon Effect had buyers, including reportedly some Amazon employees, quickly snatching up apartments in the area. The city was expected to have more than 25,000 Amazon workers over time. It had quickly flipped from a buyers' market to a sellers' market because of Amazon's announcement, according to brokers who spoke to CNN Business.

On Thursday morning, Amazon announced it would not be building the highly publicized second headquarters in New York after all, citing opposition from state and local politicians.

Now, one word keeps coming up from brokers: Disappointing.

"I'm certainly disappointed. It's been a really surprising morning, to be honest," said Lauren Renee Bennett, a broker for Corcoran who has serviced the area for the past six years, and lived there more than a decade.

She told CNN Business she recently had five contracts that were sent out within a one week period, and all were signed in "record time," because of the boom. She was even featured in the New York Post for quickly selling several condos in the area after Amazon's announcement in November.

She estimated there had been a total of $8 million worth of real estate deals with signed contracts, as well as another $4 million to $5 million currently in negotiations.

Bennett was hardly the only one who saw a sudden change in the market.

Signed condo sales contracts since the Amazon announcement were nearly triple what they were in the same period last year, according to new data compiled through this weekend by Patrick Smith, a Long Island City-based realtor with Stribling & Associates.

Smith — who had previously told CNN Business that prospective buyers had been asking to make offers without even seeing apartments— also said he was "disappointed." But that's more so over the lack of compromise between those who wanted Amazon to come to Long Island City and those who abhorred the idea, he said.

In a statement about pulling out of Long Island City on Thursday, Amazon said, "a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City."

The company's plans for additional campuses in Virginia and Tennessee remain on track.

Critics objected to the major incentives offered to lure Amazon to the area, including $1.5 billion in tax credits and grants from New York state contingent on the company creating 25,000 new high paying jobs. Protestors and some politicians claimed the deals were bad for taxpayers and the local community.

Smith added that "if the tone of the debate was perhaps more civil from both sides, there could have been a way to bridge the gap and consummate the deal and make it even better."

He said he doesn't expect to see an impact on the immediate deals he has in the works: "People are very committed with moving forward."

Kayla Lee, a sales agent for real estate firm Modern Spaces which specializes in Long Island City, said in a statement that she's "had numerous clients who have reached out since this morning's news ... shocked more than anything."

Lee added that she believes Long Island City "will still remain a highly sought after area for young professionals, families, as well as empty nesters."

Smith, too, remains optimistic. He said he's curious to see whether the area will "get any kind of bump" in the coming months because of the "excellent PR the neighborhood received" as a result of the HQ2 announcement and coverage.


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