Sotheby’s signs $50M initial loan with Natixis for office in Long Island City

Sotheby’s through the entity 25-11 49th Avenue LLC as borrower signed an initial loan with lender Natixis through the entity Natixis, New York Branch valued at $50 million for the office building (O6) at 25-11 49th Avenue in Long Island City, Queens.
The deal closed on September 30, 2022 and was recorded on October 5, 2022. The prior lender was Deutsche Bank which held debt that had an original loan amount of $81 million. The property has 194,421 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $257 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 January 21, 2022, for $82.5 million. The signatory for Sotheby’s was Marco DeSanto.

Prior sales and revenue

The 194,421-square-foot property generated revenue of $8.7 million or $45 per square foot, according to the most recent income and expense figures.

The property

The 25-11 49th Avenue parcel has frontage of 419 feet and is 454 feet deep with a total lot size of 92,105 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 $32 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 not received any significant violations in the last year.

Development

On the lot, there is one active major alteration construction project for a 119,904 square-foot B building. The project was developed by Gerard Adessa with plans filed April 16, 2018 and permitted March 8, 2019.

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 9th highest sale turnover among other neighborhoods in the city with $1.7 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 9.1 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 office buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of two of the four commercial properties representing 194,421 square feet of the 248,241 square feet. The two identified owners are Sotheby’s and LIRR.
There are no active new building construction projects on this tax block.

The majority, or 78 percent of the 248,241 square feet of built space are office buildings, with specialty buildings next occupying 20 percent of the space.

The borrower

The PincusCo database currently indicates that Sotheby’s owned at least two commercial properties in New York City with 601,680 square feet and a city-determined market value of $137 million. (Market value is typically about 50% of actual value.) Within the portfolio, all identified are office properties. The bulk, or 68 percent of the built space, is in Manhattan, with Queens next at 32 percent of the space.

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