Related, BentallGreenOak turn over second LIC office to lender BrightSpire

BrightSpire Capital through the entity BRSP Blanchard LIC, LLC paid $63.3 million to Related Companies and BentallGreenOak through the entity 2109 Borden Avenue Owner, LLC for the office building (O6) at 21-09 Borden Avenue in Long Island City, Queens.

This is the second of two buildings Related and its partner turned over to lender BrightSpire.
The deal closed on June 27, 2023 and was recorded on June 30, 2023. The property has 168,000 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $376 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 seller bought the property on March 1, 2016, for $62.5 million. The signatory for Related Companies and BentallGreenOak was Patrick Sweeney. The signatory for BrightSpire Capital was David A. Palame. BrightSpire Capital, through Colony Capital, was the former lender on the building. Related turned over this building as well as 21-02 49th Avenue to BrightSpire.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer BrightSpire Capital acquired one property in one transaction for a total value of $64.3 million and has no record it sold any properties over the past 24 months.
The seller Related Companies purchased nine properties in three transactions for a total of $138 million and sold 18 properties in 16 transactions for a total of $1.1 billion over the same time period. The 168,000-square-foot property generated revenue of $7.2 million or $43 per square foot, according to the most recent income and expense figures.

The property

The office building in Long Island City has 168,000 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 175 feet and is 180 feet deep with a total lot size of 31,499 square feet. 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 $32.4 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 three DOB violations and $1,000 in OATH penalties in the last year.

Development

On the lot, there is one active major alteration construction project for a 169,592 square-foot B building. The project was submitted by Patrick Sweeney with plans filed October 5, 2016 and permitted March 31, 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 10 million square feet of commercial and multi-family construction under development in the last two years, which represents 17 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 37,800 square feet of the 297,300 square feet. The identified owner is Broadway Stages.
There are no active new building construction projects on this tax block.

The majority, or 57 percent of the 297,300 square feet of built space are office buildings, with industrial buildings next occupying 43 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.

The buyer

The PincusCo database currently indicates that Brightspire Capital owned at least one commercial property in New York City with 129,087 square feet and a city-determined market value of $23.9 million. (Market value is typically about 50% of actual value.) The portfolio consists of at least a single office property. It is located in Queens.

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