Related, Sterling sign contract to buy two additional properties in Willets Point

Related Companies and Sterling Equities, which are planning to construct a 3.3 million square foot mixed-use development in Willets Point, Queens, signed a contract with one of the few remaining private owners of land in the large footprint of the redevelopment. The memorandum was recorded today, and the price was not disclosed.

Related and Sterling are developing the Willets Point plan that calls for 2,500 units of 100 percent affordable housing, a soccer stadium, a new school, a 250-key hotel as well as open space. The parcels recorded under contract are in the footprint of one of the residential buildings north of the soccer stadium. Most of the land for the overall project is owned by the City of New York.

In the memorandum document, Related Companies and Sterling Equities through the entity QDG Acquisition LLC recorded a memorandum of a purchase and sale agreement with the Benaim family through the entity JYB 126 LLC for adjacent properties, the industrial parcel (G2) at 126-16 Northern Boulevard and the specialty parcel (Z9) at 126-17 34th Avenue. The original contract was signed in February 2022, and has been amended, the memorandum said.

The memorandum was signed on March 20, 2023 and was recorded on March 21, 2023. The two properties have 4,880 square feet of built space and 63,306 square feet of additional air rights for a total buildable of 68,112 square feet according to PincusCo analysis of city data.

The signatory for Related Companies and Sterling Equities was Frank Monterisi and Jeff Wilpon.

Related and Sterling have filed two building plans for a total of 881 units at the site, but both are for towers on the southern portion of the development.

Because multiple properties have been transacted, some of the following sections will follow the property with the largest assessed value, which in this case, is the property on 126-16 Northern Boulevard.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Related Companies purchased 13 properties in three transactions for a total of $147.8 million and sold 20 properties in 13 transactions for a total of $921.7 million over the past 24 months.
Out of the two properties, one with a total of 4,880 square feet of built space generated revenue of $124,711 per year.

The property

The 126-16 Northern Boulevard parcel has frontage of 60 feet and is 283 feet deep with a total lot size of 11,400 square feet. The lot is irregular. The zoning is C4-4 which allows for up to 3.4 times floor area ratio (FAR) for commercial and up to 3.44 times FAR for residential. The city-designated market value for the property in 2022 is $538,000.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the properties since September of 2020. In addition, according to city public data, the properties have received $8,050 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 $5 million on this tax lot.

The neighborhood

In Willets Point, the majority, or 75 percent of the 834,702 square feet of commercial built space are industrial buildings, with specialty buildings next occupying 19 percent of the space. In sales, Willets Point has not had any sales in the last two years. For development, Willets Point has had very little major development activity relative to other neighborhoods.It had 4,956 square feet of commercial and multi-family construction under development in the last two years, which represents 0.59 percent of the neighborhood’s built space.

The block

There are no active new building construction projects on this tax block.

The majority, or 82 percent of the 58,326 square feet of built space are industrial buildings, with retail buildings next occupying 17 percent of the space.

The buyer

The PincusCo database currently indicates that Related Companies owned at least 176 commercial properties in New York City with 21,848,781 square feet and a city-determined market value of $5.3 billion. (Market value is typically about 50% of actual value.) The portfolio has $4.5 billion in debt, with top three lenders as Wells Fargo, Carlyle Group, and Bank of America respectively. Within the portfolio, the bulk, or 44 percent of the 21,848,781 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 PincusCo database currently indicates that Sterling Equities owned at least 26 commercial properties in New York City with 1,531,684 square feet and a city-determined market value of $2.8 billion. (Market value is typically about 50% of actual value.) The portfolio has $27.1 million in debt, borrowed from Valley National Bank and New York Community Bank. Within the portfolio, the bulk, or 82 percent of the 1,531,684 square feet of built space are Q6 properties, with walkup properties next occupying 11 percent of the space. The bulk, or 82 percent of the built space, is in Queens, with Brooklyn next at 17 percent of the space.

Direct link to Acris document. link