Grubb Properties signs $150M senior construction loan for 417-unit project in LIC, part of $214.5M in financing

Grubb Properties through the entity Queens Plaza North New York, LLC as borrower signed a senior construction loan with lenders Kennedy Wilson and Crum & Forster valued at $150 million for the 417-unit development at 41-34 27th Street in Long Island City, Queens.
On the lot, there is one active new building construction project for a 417-unit, 292,165 square-foot R-2 building, through job number Q00557681. The project was submitted by Grubb Properties and filed by Brian Bradley with plans filed August 23, 2021 and permitted June 8, 2023.
The deal closed on April 26, 2024 and was recorded on May 8, 2024. The prior lender was Maxim Capital Group which held debt that had an original loan amount of $58.5 million.
The owner bought the property on September 14, 2021, for $63 million. The signatory for Grubb Properties was Robert Miller. The signatory for Kennedy Wilson was In Ku Lee, and for Crum & Forster was Michael P. McTigue. CBRE’s Elliott Voreis, Nate Sittema, Kristen Reilley and Owen Hall brokred the loan for Grubb, according to a release from CBRE, which said the total financing package was $214.5 million.

Prior sales and revenue

The 54,000-square-foot property generated revenue of $1.7 million or $31 per square foot, according to the most recent income and expense figures.

The property

The development building in Long Island City has 54,000 square feet of built space and 229,660 square feet of additional air rights for a total buildable of 229,660 square feet according to a PincusCo analysis of city data. The parcel has frontage of 201 feet and is 152 feet deep with a total lot size of 30,540 square feet. The lot is irregular. The zoning is M1-5/R9 which allows for up to 5 times floor area ratio (FAR) for manufacturing and up to 7.52 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $8.1 million. The most recent loan totaled $58.5 million and was provided by Maxim Capital Group on December 22, 2023.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has received one DOB violation, $4,375 in ECB penalties, and $3,150 in OATH penalties in the last year.

Development

The neighborhood

In Long Island City, The bulk, or 32 percent of the 60.1 million square feet of commercial built space are industrial buildings, with elevator 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 $1.4 billion in sales volume in the last two years. For development, Long Island City is the 7th most active neighborhood among other neighborhoods. It had 6.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 10 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other development buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of three of the four commercial properties representing 139,900 square feet of the 151,300 square feet. The largest owner is Prospect Management, followed by Hakimian Organization and then Grubb Properties.
On the tax block, there was one new building construction project filed totaling 240,611 square feet. It is a 317-unit, 240,611 square-foot residential (R-2) building submitted by Grubb Properties and filed by Brian Bradley with plans filed August 23, 2021 and permitted April 21, 2022.

The majority, or 57 percent of the 151,300 square feet of built space are elevator buildings, with office buildings next occupying 36 percent of the space.

The borrower

The PincusCo database currently indicates that Grubb Properties owned at least three commercial properties in New York City with 54,000 square feet and a city-determined market value of $19.1 million. (Market value is typically about 50% of actual value.) The portfolio has $228.6 million in debt, with top three lenders as Maxim Capital Group, Fortress Investment Group, and Naftali Credit Partners respectively. Within the portfolio, the bulk, or 100 percent of the 54,000 square feet of built space are office properties, with G7 properties next occupying 0 percent of the space. They are all located in Queens.

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