Cape Advisors buys 12% stake from partner Cottonwood at 3 Astoria rentals

Cape Advisors through the entity Astoria West JV LLC acquired an interest from its partner at the development, Cottonwood Communities, through the entity Cottonwood Residential O.P. valued at $51.9 million for three rental buildings in Astoria, the 266-unit residential elevator building (D1) at 11-12 30th Drive, the 151-unit residential elevator building (D1) at 11-28 30th Drive, and the 140-unit residential elevator building (D1) at 11-37 31st Avenue. It was not immediately known what the $51.9 million represented.
The deal closed on July 29, 2024 and was recorded on July 30, 2024. The three properties have 375,146 square feet of built space and 113,350 square feet of additional air rights for a total buildable of 479,456 square feet according to a PincusCo analysis of city data.
This is an entity level transaction for a minority stake, and is not arms length. A 2020 report said Cottonwood was making a $15 million equity investment in the development. The amount is 11.68% according to the city documents.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Cape Advisors had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Cottonwood Communities had not purchased any other properties and had not sold any properties over the same time period. The former owners according to the Department of Housing Preservation and Development includes Craig Wood, head officer and Astoria West Mezz, Llc, shareholder. The business entities are Cape Astoria Property Manager, Llc and Astoria West, Llc.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties for the past 24 months. In addition, according to city public data, the properties have received one DOB violation, five housing violations, and $2,855 in OATH penalties in the last year.

Development

For the tax lot buildings, three out of the three buildings received a initial certificate of occupancy in the last ten years. On these lots, there is one active new building construction project, 421198028, for a 569-unit, 371,132 square-foot R-2 building. The project was submitted by Criterion Group and filed by Shibber Khan with plans filed August 17, 2015 and permitted December 16, 2015.

The block

On the tax block of 11-12 30th Drive, PincusCo has identified the owners of three of the four commercial properties representing 375,146 square feet of the 391,230 square feet. The identified owner is Cape Advisors.
On the tax block, there were two new building construction projects totaling 473,753 square feet. The largest is a 569-unit, 371,132 square-foot residential (R-2) building submitted by Criterion Group and filed by Shibber Khan with plans filed August 17, 2015 and permitted December 16, 2015. The second largest is a 142-unit, 102,621 square-foot residential (R-2) building submitted by Criterion Group and filed by Shibber Khan with plans filed August 4, 2015 and permitted December 17, 2015.

The majority, or 96 percent of the 391,230 square feet of built space are elevator buildings, with walkup buildings next occupying 4 percent of the space.

The buyer

The PincusCo database currently indicates that Cape Advisors owned at least five commercial properties with 562 residential units in New York City with 430,905 square feet and a city-determined market value of $53.8 million. (Market value is typically about 50% of actual value.) The portfolio has $255.5 million in debt, with top three lenders as AIG, Blackstone Group, and Morgan Stanley respectively. Within the portfolio, the bulk, or 87 percent of the 430,905 square feet of built space are elevator properties, with office properties next occupying 12 percent of the space. The bulk, or 87 percent of the built space, is in Queens, with Manhattan next at 13 percent of the space.

Direct link to Acris document. link