Paceline Equity Partners signs $24.4M acquisition loan with Ponce Bank for LIC hotel

Paceline Equity Partners through the entity Lic Hotel Operating Company, LLC as borrower signed an acquisition loan with lender Ponce Bank valued at $24.4 million for the hotel building (HS) at 29-14 39th Avenue in Long Island City, Queens.
The deal closed on July 20, 2023 and was recorded on July 27, 2023. The prior lender was Ponce Bank which held debt that had an original loan amount of $25 million.
The property has 63,648 square feet of built space according to a PincusCo analysis of city data. The loan price per built square foot is $383 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 owner bought the property on July 3, 2007, for $3.5 million. The signatory for Paceline Equity Partners was Kyle Volluz. The signatory for Ponce Bank was Steven A. Tsavaris.

The property

The hotel building in Long Island City has 63,648 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 75 feet and is 125 feet deep with a total lot size of 12,541 square feet. The lot is irregular. The zoning is M1-3/R7X which allows for up to 5 times floor area ratio (FAR) for manufacturing and up to 5 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $16.3 million. The most recent loan totaled $25 million and was provided by Ponce Bank on June 7, 2022.

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 not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on April 18, 2014. 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 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 9th highest sale turnover among other neighborhoods in the city with $1.9 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 8.7 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 six of the 12 commercial properties representing 189,230 square feet of the 304,930 square feet. The largest owner is Radson Development, followed by John Morgan and then Hui Shi.
On the tax block, there were two new building construction projects totaling 74,627 square feet. The largest is a 50-unit, 37,314 square-foot residential (R-2) building submitted by Hui Shi and filed by Hui Shi with plans filed November 12, 2021 and it has not been permitted yet. The second largest is a 50-unit, 37,313 square-foot residential (R-2) building submitted by Hui Shi and filed by Hui Shi with plans filed December 15, 2021 and permitted May 19, 2022.

The majority, or 42 percent of the 304,930 square feet of built space are hotel buildings, with elevator buildings next occupying 31 percent of the space.

The borrower

The PincusCo database currently indicates that Paceline Equity Partners owned at least one commercial property with 10 residential units in New York City with 32,088 square feet and a city-determined market value of $8 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single D4 property. It is located in Manhattan.

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