Related, BentallGreenOak turn over LIC office to lender BrightSpire through $64.3M deed-in-lieu

BrightSpire Capital through the entity BRSP Paragon LIC, LLC acquired from Related Companies fund and BentallGreenOak through the entity 2100 49th Avenue Owner, LLC, the office building (O6) at 21-00 49th Avenue in Long Island City, Queens, in a transfer valued at $64.3 million.
The owners had borrowed $58.8 million from BrightSpire, known as Colony Capital Real Estate until 2021.
The Real Deal reported in February that the owners were preparing to turn over the property that had a loan in default, through a deed-in-lieu of foreclosure.
The deal closed on June 20, 2023 and was recorded on June 23, 2023. The property has 129,087 square feet of built space according to a PincusCo analysis of city data. The transfer price per built square foot is $497 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 sale records do not identify the transfer as a deed-in-lieu.
The Related fund bought the property in 2016 for $41 million along with another office property, 21-09 Borden Avenue, which it bought for $62.5 million. No recent transfer records have been filed for that property, which has $60.9 million in debt held by BrightSpire Capital. The signatory for Related Companies was Patrick Sweeney. The signatory for BrightSpire Capital was David A. Palame.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer BrightSpire Capital had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Related Companies purchased 15 properties in four transactions for a total of $147.8 million and sold 23 properties in 16 transactions for a total of $1.1 billion over the same time period. The 129,087-square-foot property generated revenue of $5.3 million or $41 per square foot, according to the most recent income and expense figures.

The property

The office building in Long Island City has 129,087 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 218 feet and is 172 feet deep with a total lot size of 22,525 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 $23.9 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 six DOB violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on September 10, 2019. On the lot, there is one active major alteration construction project for a 92,917 square-foot B building. The project was submitted by Patrick Sweeney with plans filed May 10, 2016 and permitted April 10, 2017.

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 $1.8 billion in sales volume in the last two years. For development, Long Island City is the 3rd most active neighborhood among other neighborhoods. It had 9.9 million square feet of commercial and multi-family construction under development in the last two years, which represents 16 percent of the neighborhood’s built space. There were three pre-foreclosure suit filed among other office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the five commercial properties representing zero square feet of the 143,527 square feet. The two identified owners are Nan Fung Group and LIRR.
On the tax block, there was one new building construction project filed totaling 1,000 square feet. It is a storage (S-2) building submitted by Innovo Property Group and filed by Andrew Chung with plans filed June 28, 2022 and it has not been permitted yet.

The majority, or 90 percent of the 143,527 square feet of built space are office buildings, with industrial buildings next occupying 10 percent of the space.

The seller

The PincusCo database currently indicates that Related Companies owned at least 178 commercial properties with 9,571 residential units in New York City with 21,405,438 square feet and a city-determined market value of $6 billion. (Market value is typically about 50% of actual value.) The portfolio has $4.7 billion in debt, with top three lenders as Wells Fargo, Carlyle Group, and Deutsche Bank respectively. Within the portfolio, the bulk, or 45 percent of the 21,405,438 square feet of built space are elevator properties, with office properties next occupying 30 percent of the space. The bulk, or 61 percent of the built space, is in Manhattan, with Bronx next at 23 percent of the space.

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