Palette Hotels pays $25.5M to Taconic Capital Advisors for LIC hotel

Palette Hotels through the entity Ph Lic Partners LLC paid $25.5 million to Taconic Capital Advisors through the entity Z Hotel LIC Principal LLC for the hotel building (HB) at 11-01 43rd Avenue in Long Island City, Queens. The expected use is cash flowing.
The deal closed on November 18, 2025 and was recorded on December 1, 2025. The property has 31,520 square feet of built space and 480 square feet of additional air rights for a total buildable of 32,000 square feet according to a PincusCo analysis of city data. The sale price per built square foot is $809 and the price per buildable square foot is $796 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.)
Taconic, which is typically a lender, took title to the property from the former borrower on May 11, 2021, in a transaction valued for tax purposes at $38.38 million. The signatory for Taconic Capital Advisors was Erin Rota . (Taconic Capital Advisors is not affiliated with Taconic Partners.) The signatory for Palette Hotels was Richard Lou. The contract date was August 28, 2025. Merchants Hospitality borrowed $38 million from Taconic Capital Advisors in 2019. In May 2021, Merchants turned the property over to Taconic Capital Advisors for $38.38 million.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Palette Hotels had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Taconic Capital Advisors had not purchased any other properties and had not sold any properties over the same time period. The 31,520-square-foot property generated revenue of $4.5 million or $142 per square foot, according to the most recent income and expense figures.

The property

The hotel building in Long Island City has 31,520 square feet of built space and 480 square feet of additional air rights for a total buildable of 32,000 square feet according to a PincusCo analysis of city data. The parcel has frontage of 94 feet and is 165 feet deep with a total lot size of 16,000 square feet. The lot is irregular. The zoning is M1-4 which allows for up to 2 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $11.2 million.

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 received seven DOB violations and $2,180 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 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 3.1 times the average sales volume among other neighborhoods with $929.7 million in sales volume in the last two years and is the highest in Queens. For development, Long Island City is the 9th most active neighborhood among other neighborhoods. It had 6.3 million square feet of commercial and multi-family construction under development in the last two years, which represents 11 percent of the neighborhood’s built space. There was one pre-foreclosure suit filed among other hotel buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the eight commercial properties representing 41,284 square feet of the 119,855 square feet. The two identified owners are Merchants Hospitality and Jas 12th Street Holding Llc.
There are no active new building construction projects on this tax block.

The majority, or 66 percent of the 119,855 square feet of built space are industrial buildings, with hotel buildings next occupying 26 percent of the space.

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