Innovo, Nan Fung Group, sign $304.6M construction loan with JPMorgan Chase for 680K LIC warehouse

Innovo Property Group, Nan Fung Group, and Atalaya Capital Management through the entity 23-30 Borden Owner LLC as borrower signed a new construction loan with lender JPMorgan Chase valued at $304.6 million for the development building (V1) at 23-30 Borden Avenue in Long Island City, Queens. Innovo is developing a 679,638-square-foot warehouse (S-1) building with plans filed December 24, 2020 and permitted December 1, 2021.
The deal closed on July 22, 2022 and was recorded on August 2, 2022. The prior lender was Starwood Capital Group which held debt that had an original loan amount of $93 million.
The owner bought the property on January 24, 2019, for $75 million. The signatory for Innovo Property Group, Nan Fung Group, and Atalaya Capital Management was Ryan Bathie. The signatory for JPMorgan Chase was Simon B. Burce.

The property

The 23-30 Borden Avenue parcel has frontage of 654 feet and is 329 feet deep with a total lot size of 203,236 square feet. The lot is irregular. The zoning is M3-2 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $20.3 million. The most recent loan totaled $93 million and was provided by Starwood Capital Group on March 1, 2021.

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 $12,500 in ECB penalties and $12,850 in OATH penalties in the last year.

The neighborhood

In Long Island City, the bulk, or 34 percent of the 63.3 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 6th highest sale turnover among other neighborhoods in the city with $1.7 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 8.8 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.

The block

On this tax block, PincusCo has identified the owners of seven of the 10 commercial properties representing 139,164 square feet of the 161,924 square feet. The largest owner is Pimco, followed by Lirr and then John P. Pantanelli. There is one active new building construction project totaling 679,638 square feet. It is a 679,638-square-foot warehouse S-1 building developed by Andrew Chung with plans filed December 24, 2020 and permitted December 1, 2021.

The majority, or 74 percent of the 161,924 square feet of built space are industrial buildings, with specialty buildings next occupying 26 percent of the space.

The borrower

The PincusCo database currently indicates that Innovo Property Group owned at least 11 commercial properties in New York City with 970,563 square feet and a city-determined market value of $69.2 million. (Market value is typically about 50% of actual value.) The portfolio has $298.4 million in debt, with top three lenders as Cerberus Capital Management, Starwood Property Trust, and Starwood Capital Group respectively. Within the portfolio, the bulk, or 67 percent of the 970,563 square feet of built space are office properties, with industrial properties next occupying 33 percent of the space. The bulk, or 71 percent of the built space, is in Queens, with Bronx next at 29 percent of the space.

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