Innovo pays $11M for industrial in Long Island City, adjacent to large Innovo project

Innovo Property Group through the entity 21-32 Borden Avenue LLC paid $11 million to long-time owner Paul D. McKinnell through the entity M & L Realty Associates LLC for the industrial building (E1) at 21-32 Borden Avenue in Long Island City, Queens. This parcel is adjacent to and just west of a large Innovo development project at 23-30 Borden Avenue, filed in 2020.
The deal closed on July 15, 2022 and was recorded on July 22, 2022. The property has 25,780 square feet of built space and 34,200 square feet of additional air rights for a total buildable of 60,000 square feet according to PincusCo analysis of city data. The sale price per built square foot is $426 and the price per buildable square foot is $183 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.)
Paul D. McKinnell was the most recent signatory, and is a member of the investment firm Southpaw Ventures. Kenneth Lippmann was a signatory for the seller entity, in 2003.

Prior sales and revenue

The 25,780-square-foot property generated revenue of $567,662 or $22 per square foot, according to the most recent income and expense figures.

The property

The 21-32 Borden Avenue parcel has frontage of 117 feet and is 266 feet deep with a total lot size of 30,000 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 $2.4 million.

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 not received any significant violations 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 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 8.4 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 was one pre-foreclosure suit filed among other industrial buildings in the past 12 months.

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 S-1 building developed by Andrew Chung of Innovo 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.

Surrounding

Within a 400-foot radius of 21-32 Borden Avenue, PincusCo identified two commercial real estate items of interests occurred over the past 24 months.
One of those two items was a sale which PIMCO bought a stake in the Innovo development site (V1) on 23-30 Borden Avenue for $13.2 million from Innovo Property Group on August 13, 2021.
One of those two items was a loan which Innovo borrowed $93 million from Starwood Capital Group secured by the 181,674-square-foot development site (V1) on 23-30 Borden Avenue on March 12, 2021.

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