Sunlight Development pays $48M for 125-unit dev site in Flushing

Sunlight Development through the entity Jingang Northern LLC paid $48 million to the retail-owning Macari family through the entity Kit Realty Inc. for the retail building (K1) at 138-28 Northern Boulevard in Flushing, Queens. Sunlight last week filed plans for a 125-unit project on the parcel.
The deal closed on October 14, 2022 and was recorded on October 31, 2022. The property has 13,702 square feet of built space and 91,390 square feet of additional air rights for a total buildable of 105,250 square feet according to PincusCo analysis of city data. The sale price per built square foot is $3,503 and the price per buildable square foot is $456 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 the Macari family was Diane Macari. The signatory for Sunlight Development was Linzhong Zhuo. Members of the Macari family own seven other New York City properties, all retail and all in Queens, with a total of 122,805 square feet, in neighborhoods such as Flushing, Sunnyside and Forest Hills. The largest is 68-16 Main Street in Flushing.
Sunlight Development through the entity Jingang Northern LLC as borrower signed a acquisition loan with lender S3 Capital through the entity S3 Re Northern Blvd II Funding LLC valued at $28 million for the retail building (K1) at 138-28 Northern Boulevard in Flushing, Queens.

Development

On the lot, there are two active new building construction projects and major alteration projects with initial costs more than $5 million, totaling 13,832 square feet. The largest is a new building project for a 125-unit residential (R-2) building developed by Linzhong Zhuo with plans filed October 29, 2022 and it has not been permitted yet. The second largest is a new building project for a 5,953 square-foot office (B) building developed by Linzhong Zhuo with plans filed October 28, 2022 and it has not been permitted yet.

Prior sales and revenue

Prior to this transaction, Pincusco has records that the buyer Sunlight Development purchased five properties in two transactions for a total of $36.2 million and has no record it sold any properties over the past 24 months.
The seller Diane Macari had not purchased any other properties and had not sold any properties over the same time period. The 13,702-square-foot property generated revenue of $1 million or $75 per square foot, according to the most recent income and expense figures.

The property

The 138-28 Northern Boulevard parcel has frontage of 184 feet and is 232 feet deep with a total lot size of 43,313 square feet. The lot is irregular. The zoning is R6 which allows for up to 2.43 times floor area ratio (FAR) for residential. The city-designated market value for the property in 2022 is $8.5 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 received $300 in OATH penalties in the last year.

The neighborhood

In Flushing, the bulk, or 45 percent of the 37.8 million square feet of commercial built space are elevator buildings, with specialty buildings next occupying 20 percent of the space. In sales, Flushing has 1.6 times the average sales volume among other neighborhoods with $547.5 million in sales volume in the last two years and is the 4th highest in Queens. For development, Flushing has 2.8 times the average amount of major developments relative to other neighborhoods and is the 5th highest in Queens. It had 2.8 million square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of one of the 69 commercial properties representing 79,224 square feet of the 264,428 square feet. The identified owner is Steven Frey.

The majority, or 79 percent of the 240,496 square feet of built space are elevator buildings, with retail buildings next occupying 9 percent of the space.

The buyer

The PincusCo database currently indicates that Sunlight Development owned at least five commercial properties in New York City with 58,645 square feet and a city-determined market value of $8.7 million. (Market value is typically about 50% of actual value.) The portfolio has $8.4 million in debt, borrowed from S3 Capital. Within the portfolio, the bulk, or 59 percent of the 58,645 square feet of built space are elevator properties, with industrial properties next occupying 41 percent of the space. They are all located in Queens.

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