Daryl Hagler pays $63M to Teddy Li for hotel in Long Island City

Daryl Hagler through the entity 38-59 11th Street LLC paid $63 million to Teddy Li through the entity 559 Development LLC for hotel building (H2) at 38-59 11th Street in Long Island City, Queens.
The deal closed on June 30, 2022 and was recorded on July 11, 2022. The property has 182,685 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $344 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The seller bought the property on July 23, 2013, for $6.2 million.

Prior sales and revenue

The 182,685-square-foot property generated revenue of $10.4 million or $57 per square foot, according to the most recent income and expense figures.

The property

The 38-59 11th Street parcel has frontage of 150 feet and is 172 feet deep with a total lot size of 19,159 square feet. The lot is irregular. The zoning is M1-3 which allows for up to 5 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $4.3 million.The most recent loan totaled $41.4 million and was provided by Madison Realty Capital on October 31, 2019.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property since September of 2020. In addition, according to city public data, the property has received $935 in OATH penalties in the last year.

Development

On these lots, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 173,614 square feet. The largest is a new building project for a 240-unit, 119,450-square-foot R-1 building developed by Teddy Li with plans filed April 2, 2018 and permitted August 31, 2018. The second largest is a new building project for a 116-unit, 54,164-square-foot R-1 building developed by Teddy Li with plans filed July 11, 2014 and it has not been permitted yet.

The neighborhood

In Long Island City, the bulk, or 34 percent of the 64.6 million square feet of commercial built space are residential elevator buildings, with industrial buildings next occupying 31 percent of the space. In sales, Long Island City has the 7th highest sale turnover among other neighborhoods in the city with $1.6 billion in sales volume in the last two years. For development, Long Island City is the 4th most active neighborhood among other neighborhoods. It had 8.4 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space. There were four pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the 12 commercial properties representing 197,685 square feet of the 420,126 square feet. The two identified owners are Teddy Li and Barone Management. There are five active new building construction projects totaling 288,500 square feet. The largest is a 50-unit, 16,228-square-foot R-1 building developed by Xiao Zhuang Ge with plans filed March 12, 2013 and permitted August 24, 2015. The second largest is a 178-unit, 57,206-square-foot R-1 building developed by Joe Zhang with plans filed September 23, 2014 and permitted June 29, 2018.

The majority, or 84 percent of the 420,126 square feet of built space are hotel buildings, with industrial buildings next occupying 11 percent of the space.

Surrounding

Within a 400-foot radius of 38-59 11th Street, PincusCo identified two commercial real estate items of interests occurred over the past 24 months.
Of those two items, one was for major renovation including a certificate of occupancy change. It was a permit application filed on October 26, 2021 for the $250,000 renovation of 9,471-square-foot E building with one residential units at 11-11 40th Avenue.
One of those two items was a loan which Mayflower Business Group borrowed $35 million from Industrial and Commercial Bank of China secured by the 58,960-square-foot, one-unit hotel (H9) on 38-59 12th Street on January 26, 2022.

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