SB Development pays $19M for 132-unit dev site in Long Island City

SB Development through the entity LIC 40th Avenue Owner LLC paid $19 million to Steve S. Cheung through the entity E Home Real Estate, LLC for the development site composed 29-24 40th Avenue and 29-16 40th Avenue in Long Island City, Queens.

Joseph Stern of SB Development plans to build a 132-unit residential building. He filed a new building construction plan on March 4, 2022, for a residential (R-2) building. It has not been permitted yet.
The sale closed on July 27, 2022 and was recorded on August 11, 2022. The two properties have 28,849 square feet of built space and 58,716 square feet of additional air rights for a total buildable of 87,550 square feet according to PincusCo analysis of city data. The sale price per built square foot is $658 and the price per buildable square foot is $217 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 signatory for Steve S. Cheung was Steve S. Cheung. The signatory for SB Development was Joseph Stern.

SB Development financed the acquisition with a $12 million loan from Hirshmark Capital.

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 29-24 40th Avenue.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer SB Development had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Steve S. Cheung had not purchased any other properties and sold one property in one transaction for a total of $3.6 million over the same time period. The two properties with a total of 28,849 square feet of built space generated revenue of $622,182 per year or $22 per square foot. The sale price per square foot was $659.

The property

The 29-24 40th Avenue parcel has frontage of 79 feet and is 231 feet deep with a total lot size of 11,760 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 $1.5 million.

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 $700 in OATH penalties in the last year.

Development

On these lots, there is one active new building construction project for a 26-unit, 29,859-square-foot R-2 building. The project was developed by Joseph Stern with plans filed March 4, 2022 and it has not been permitted yet.

The neighborhood

In Long Island City, the bulk, or 34 percent of the 63.3 million square feet of commercial built space are elevator buildings, with industrial buildings next occupying 32 percent of the space. In sales, Long Island City has the 7th 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 4th most active neighborhood among other neighborhoods. It had 8.9 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 was one pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On the tax block of 29-24 40th Avenue, PincusCo has identified the owners of four of the 15 commercial properties representing 152,749 square feet of the 344,898 square feet. The largest owner is CubeSmart, followed by Yali Li and then Wilson Alves.
There are three active new building construction projects totaling 41,599 square feet. The largest is a 26-unit, 29,859-square-foot R-2 building developed by Joseph Stern with plans filed March 4, 2022 and it has not been permitted yet.The second largest is a N/A-unit, 5,870-square-foot M building developed by Kyong Park with plans filed February 12, 2016 and permitted August 14, 2019.

the majority, or 45 percent of the 344,898 square feet of built space are hotel buildings, with industrial buildings next occupying 43 percent of the space.

The seller

The PincusCo database currently indicates that Steve S. Cheung owned at least two commercial properties in New York City with 25,000 square feet and a city-determined market value of $2.2 million. (Market value is typically about 50% of actual value.) The portfolio has $12 million in debt, borrowed from Hirshmark Capital and Popular Bank. Within the portfolio, the bulk, or 100 percent of the 25,000 square feet of built space are elevator properties, with industrial properties next occupying 0 percent of the space. They are all located in Queens.

Direct link to Acris document. link