Radson Development signs $25M refi with Ponce Bank for LIC hotel

Radson Development through the entity Lic Hotel Property LLC as borrower signed a refi loan with lender Ponce Bank valued at $25 million for the corner hotel building at 29-14 39th Avenue in Long Island City, Queens.
The deal closed on June 7, 2022 and was recorded on June 29, 2022. The prior lender was Greystone & Co. which held debt that had an original loan amount of $25 million. The property has 63,648 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $392 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 Radson Development was Jacob Rad. The signatory for Ponce Bank was Carlos P. Naudon. Jacob Rad is the co-founder of Radson Development.

The property

The 29-14 39th Avenue 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 $15.4 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 received $935 in OATH penalties 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 $5 million on this tax lot.

The neighborhood

In Long Island City, the bulk, or 33 percent of the 66.2 million square feet of commercial built space are residential elevator buildings, with industrial buildings next occupying 30 percent of the space. In sales, Long Island City has 4.2 times the average sales volume among other neighborhoods with $1.2 billion in sales volume in the last two years and is the highest in Queens. For development, Long Island City is the 2nd most active neighborhood among other neighborhoods. It had 9.2 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 were two 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 12 commercial properties representing 102,282 square feet of the 304,930 square feet. The two identified owners are Hazelton Capital Group and Flux Factory. There are three active new building construction projects totaling 161,224 square feet. The largest is a 103-unit, 70,835-square-foot R-2 building developed by Joe Stern with plans filed June 24, 2019 and permitted May 20, 2020. The second largest is a 50-unit, 37,314-square-foot R-2 building developed by Hui Shi with plans filed November 12, 2021 and it has not been permitted yet.

The majority, or 40 percent of the 316,961 square feet of built space are hotel buildings, with residential elevator buildings next occupying 30 percent of the space.

The borrower

The PincusCo database currently indicates that Radson Development owned at least four commercial properties and a city-determined market value of $5.7 million. (Market value is typically about 50% of actual value.) The portfolio has $231.9 million in debt, borrowed from NYC Housing Development Corporation. Within the portfolio, the bulk are development properties.

Surrounding

Within a 400-foot radius of 29-14 39th Avenue, PincusCo identified five commercial real estate items of interests occurred over the past 24 months.
Of those five items, four were in new building development. There were two new building permit applications and two new building permits. The most recent of these four items was a filing on December 15, 2021 for a 37,313-square-foot R-2 building with 50 residential units at 39-26 30th Street.
One of those five items was a loan which Nestor J. Varela borrowed $6 million from Ponce Bank secured by the 0-square-foot development site (V1) on 39-08 29th Street on April 25, 2022.

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