Watermark Capital signs $15M ground lease for LIC dev site

Wolfe Landau’s Watermark Capital Group through the entity The Pecora LLC as tenant signed a $15 million ground lease with landlord Gianpietro Pecora through the entity Forte Italia LLC for the vacant parking lot (G6) at 41-02 Crescent Street in Long Island City, Queens.
On the lot, there is one new building construction project for a 96-unit, 149,580 square-foot R-2 building. The project was submitted by Anthony Pecora and filed by Anthony Pecora with plans filed December 24, 2014 and permitted December 21, 2015.

The ground lease memorandum closed on December 15, 2023 and was recorded on December 28, 2023. The property has zero square feet of built space and 149,995 square feet of additional air rights for a total buildable of 149,995 square feet according to a PincusCo analysis of city data. The sale price per buildable square foot is $100 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 signatories for Gianpietro Pecora were Gianpietro Pecora and Josephine M. Troia. The signatory for Watermark Capital Group was Wolfe Landau.

Prior sales and revenue

Prior to this transaction, PincusCo has records that the buyer Watermark Capital Group purchased six properties in three transactions for a total of $29.6 million and sold one property in one transactions for a total of $4 million over the past 24 months.
The seller Gianpietro Pecora had not purchased any other properties and sold one properties in one transactions for a total of $5.7 million over the same time period.

The property

The parcel has frontage of 200 feet and is 150 feet deep with a total lot size of 29,999 square feet. The zoning is M1-5/R7-3 which allows for up to 5 times floor area ratio (FAR) for manufacturing The city-designated market value for the property in 2022 is $1.4 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 $1,990 in OATH penalties in the last year.

Development

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 $1.7 billion in sales volume in the last two years. For development, Long Island City is the 5th most active neighborhood among other neighborhoods. It had 7.7 million square feet of commercial and multi-family construction under development in the last two years, which represents 13 percent of the neighborhood’s built space. There were two pre-foreclosure suit filed among other industrial buildings in the past 12 months.

The block

On this tax block, PincusCo has identified the owners of eight of the 10 commercial properties representing 352,089 square feet of the 360,514 square feet. The largest owner is New Empire, followed by Elpida Tzilianos and then Ciampa Organization.
On the tax block, there were three new building construction projects totaling 263,114 square feet. The largest is a 96-unit, 149,580 square-foot residential (R-2) building submitted by Anthony Pecora and filed by Anthony Pecora with plans filed December 24, 2014 and permitted December 21, 2015. The second largest is a 116-unit, 93,514 square-foot residential (R-2) building submitted by New Empire Corp. and filed by Bentley Zhao with plans filed June 23, 2022 and permitted May 15, 2023.

The majority, or 93 percent of the 360,514 square feet of built space are elevator buildings, with walkup buildings next occupying 3 percent of the space.

The seller

The PincusCo database currently indicates that Gianpietro Pecora owned at least two commercial properties with 18 residential units in New York City with 15,115 square feet and a city-determined market value of $7.8 million. (Market value is typically about 50% of actual value.) The portfolio has $5 million in debt, borrowed from Citibank. Within the portfolio, the bulk, or 67 percent of the 15,115 square feet of built space are walkup properties, with mixed-use properties next occupying 33 percent of the space. They are all located in Manhattan.

The buyer

The PincusCo database currently indicates that Watermark Capital Group owned at least 120 commercial properties with 1,448 residential units in New York City with 1,215,933 square feet and a city-determined market value of $227.7 million. (Market value is typically about 50% of actual value.) The portfolio has $62.5 million in debt, with top three lenders as Signature Bank, Bridge City Funding, and Broadview Capital respectively. Within the portfolio, the bulk, or 68 percent of the 1,215,933 square feet of built space are walkup properties, with elevator properties next occupying 25 percent of the space. The bulk, or 93 percent of the built space, is in Brooklyn, with Queens next at 7 percent of the space.

Direct link to Acris document. link