GTJ REIT signs $113.5M refi loan with Blackstone, AIG for six industrial properties in NYC

GTJ REIT, which focuses mostly on industrial assets, through the entity GWL 23-85 87th LLC as borrower signed a refi loan with lender Blackstone Group and AIG through the entity American General Life Insurance Company valued at $113.5 million for six industrial properties including the industrial building (G8) at 23-25 87th Street in Jackson Heights, Queens, industrial building (G1) at 612 Wortman Avenue in East New York, Brooklyn, and industrial building (G1) at 88-08 23rd Avenue in Jackson Heights, Queens.
The deal closed on March 15, 2024 and was recorded on March 19, 2024. The six properties have 83,270 square feet of built space and 724,578 square feet of additional air rights for a total buildable of 807,680 square feet according to a PincusCo analysis of city data. The loan price per built square foot is $1,363 and the price per buildable square foot is $140 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 signatory for GTJ REIT was Paul Cooper. The signatory for Blackstone Group and AIG was Kevin Pivnick.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 23-25 87th Street.

Prior sales and revenue

Out of the six properties, two with a total of 83,270 square feet of built space generated revenue of $1.2 million per year.

The property

The industrial buildings in Jackson Heights have 83,270 square feet of built space and 724,578 square feet of additional air rights for a total buildable of 807,680 square feet according to a PincusCo analysis of city data. The parcel has frontage of 200 feet and is 426 feet deep with a total lot size of 85,230 square feet. The zoning is M1-1 which allows for up to 1 times floor area ratio (FAR) for manufacturing. The city-designated market value for the property in 2022 is $19.1 million. The most recent loan totaled $19 million and was provided by KeyBank on August 5, 2022.

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 four DOB violations and $200 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In Jackson Heights, The bulk, or 42 percent of the 16.4 million square feet of commercial built space are elevator buildings, with walkup buildings next occupying 18 percent of the space. In sales, Jackson Heights has had very little sales volume relative to other neighborhoods with $145.4 million in sales volume in the last two years. For development, Jackson Heights has had very little major development activity relative to other neighborhoods.It had 335,474 square feet of commercial and multi-family construction under development in the last two years, which represents 2 percent of the neighborhood’s built space.

The block

On the tax block of 23-25 87th Street, PincusCo has identified the owners of one of the two commercial properties representing 47,245 square feet of the 85,505 square feet. The identified owner is GTJ REIT.
There are no active new building construction projects on this tax block.

The majority, or 55 percent of the 85,505 square feet of built space are industrial buildings, with hotel buildings next occupying 45 percent of the space.

The borrower

The PincusCo database currently indicates that GTJ REIT owned at least 11 commercial properties in New York City with 233,657 square feet and a city-determined market value of $63.4 million. (Market value is typically about 50% of actual value.) Within the portfolio, the bulk, or 86 percent of the 233,657 square feet of built space are industrial properties, with specialty properties next occupying 14 percent of the space. The bulk, or 87 percent of the built space, is in Queens, with Brooklyn next at 13 percent of the space.

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