iCross buys $23M note secured by United Construction & Development Group LIC dev site

Lily Guo’s iCross Capital through the entity iCross 6 LLC bought a note with an original principal of $23 million from Bank of China secured by United Construction & Development Group’s industrial building (E1) at 42-61 24th Street in Long Island City, Queens.
The deal closed on January 26, 2023 and was recorded on January 31, 2023. The prior lender was Bank of China which held debt that had an original loan amount of $23 million.

The two properties have 76,000 square feet of built space and 79,588 square feet of additional air rights for a total buildable of 155,664 square feet according to PincusCo analysis of city data.
The signatory for the 2022 loan to United Construction & Development Group was Jiashu Xu. Developer Chris Jiashu Xu of United Construction & Development bought the parcel composed of two tax lots in January 2022 for $40 million and borrowed $23 million at the time from Bank of China. In September 2022, Xu filed to demolish the 76,000 square foot building on the property. His firm filed three holdover cases against commercial tenants. According to the filings Xu holds a demo clause in the leases and has won judgments of possession in two of them, according to a review of court records.

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 42-61 24th Street.

Prior sales and revenue

Out of the two properties, one with a total of 76,000 square feet of built space generated revenue of $1.1 million per year.

The property

The 42-61 24th Street parcel has frontage of 150 feet and is 140 feet deep with a total lot size of 18,200 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 $4.5 million.The most recent loan totaled $23 million and was provided by Bank of China on January 26, 2022.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received four DOB violations and $500 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 $5 million on this tax lot.

The neighborhood

In Long Island City, the bulk, or 33 percent of the 62.1 million square feet of commercial built space are elevator buildings, with industrial buildings next occupying 32 percent of the space. In sales, Long Island City has the 9th 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 9 million square feet of commercial and multi-family construction under development in the last two years, which represents 14 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On the tax block of 42-61 24th Street, PincusCo has identified the owners of three of the 12 commercial properties representing 91,537 square feet of the 118,334 square feet. The two identified owners are United Construction & Development Group and Andy Ho.
There are no active new building construction projects on this tax block.

The majority, or 85 percent of the 105,537 square feet of built space are industrial buildings, with elevator buildings next occupying 15 percent of the space.

The borrower

The PincusCo database currently indicates that United Construction & Development Group owned at least 14 commercial properties in New York City with 977,191 square feet and a city-determined market value of $136.2 million. (Market value is typically about 50% of actual value.) The portfolio has $437.9 million in debt, with top three lenders as Bank of China, Centennial Bank, and Bank Leumi respectively. Within the portfolio, the bulk, or 43 percent of the 977,191 square feet of built space are office properties, with elevator properties next occupying 31 percent of the space. The bulk, or 92 percent of the built space, is in Queens, with Brooklyn next at 8 percent of the space.

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