[IMGCAP(2)]The area has been known as an industrial neighborhoodfor decades, Zuckerbrot says. He explained that the area hasflourished in recent years and is outgrowing its industrialidentity.

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Dolgin tells GlobeSt.com that "properties along the waterfrontare transforming into hi-rise apartments and the large industrialbuildings are renovating to accommodate other uses, such ascommercial offices," he says. "However, it is hard to say that LongIsland City is outgrowing its industrial identity."

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[IMGCAP(3)]Dolgin continues to note that "the waterfrontlocations have been replaced with beautiful buildings and theblight is being removed permanently, yet the area still maintainsan industrial feel which many people may enjoy. Thestill-industrial areas are being updated with better types ofbusinesses, many relocating from Manhattan. There has also been adramatic push into office space from Long Island City's historicindustrial, manufacturing or warehouse heritage."

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Zuckerbrot says that the growth comprises several areasincluding: retail chains such as Starbucks, Applebee's and PaneraBread; Kaufman-Astoria Studios is expanding here; the Museum of theMoving Image is expanding its space across the street fromKaufman-Astoria; the educational sector continues to expand. TheFrank Sinatra School of the Arts is set to open shortly, and otherschools are active in the area; there has been an enormous increasein new apartments, with no fewer than 40 new residentialdevelopments built in the area over the last few years.

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However, Reinertsen tells GlobeSt.com that even with the FrankSinatra School soon to open; there are not a lot of schools downtowards the waterfront where the new residential units are allbeing built. "On the whole, if they were to populate the buildings,we would have a problem with schooling," he explains. "Schoolsdon't site very easily."

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In the meantime, Zuckerbrot says that the supply of industrialproperties in Long Island City is dropping. "With all the recentnew developments and conversions, plus rezoning, there is reducedinventory of industrial sites in Long Island City," he says. "Thathas actually helped the industrial market there to remain buoyant,thanks not only to the diminished supply of properties, but also tothe availability of financing and of incentive programs."

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For credit-worthy deals, Zuckerbrot says that traditional loansare available, but perhaps requiring a little more equity. "Andthat's because demand has remained strong," adds Zuckerbrot."Accordingly, despite concerns that the commercial market may beover-heating and building prices in Manhattan are somewhat down,Long Island City's industrial buildings have become a growingtarget for buyers, which include users and investors." He continuesthat "there is considerable competition for those buildings.Investors can typically pay a lot more than users, depending on thefloor area ratio. And with the zoning changes in Long Island City,the more generous F.A.R.'s allow bigger developments," he says.

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Reinertsen tells GlobeSt.com that the area was always the "kindof premier address for industrial, and with all the rezoning inrecent years, what's left got to be more expensive." He agrees withZuckerbrot that industrial property is doing well. "Demand is thesame or more, and there is less product," he says. "Industrial hasbeen steady and increasing for the past six years.

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Reinertsen explains that Tishman for example an RFP on a garagesite in the area and has been trolling tenants for the past threeyears. "If they land one, they will build it and if they don't thenthey won't and it will stay a garage site." He notes although yes,there have been a few commercial tenants--such as Citibank and theUnited Nations credit facility--there hasn't been a huge increase,which he says can partially be blamed on the lack of amenities."When people come out here to look around for commercial space,they don't see any amenities. In essence, the residential willhelp, but until that's up and running, it will be difficult toattract tenants. …You want a 24-hour community."

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.