Yitzchok Katz signs $72.5M construction loan for parcel with 41-unit LIC project

Yitzchok Katz through the entity 39th Ave Holdings 1 LLC as borrower signed a new construction loan with lender G4 Capital Partners through the entity G4 18234, LLC valued at $72.5 million for a parcel that has a 41-unit project at 32-03 39th Avenue in Long Island City, Queens.
The deal closed on June 2, 2022 and was recorded on June 28, 2022. The prior lender was NYS Dormitory Authority which held debt that had an original loan amount of $19.2 million. The two parcels of the development site have 22,500 square feet of built space and 108,950 square feet of additional air rights for a total buildable of 131,535 square feet according to PincusCo analysis of city data. The loan price per built square foot is $3,222 and the price per buildable square foot is $551 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 Yitzchok Katz was Yitzchok Katz.

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 32-03 39th Avenue.

The property

The 32-03 39th Avenue parcel has frontage of 75 feet and is 201 feet deep with a total lot size of 17,507 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 $2.6 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 not received any significant violations in the last year.

Development

On these lots, there is one active new building construction project for a 41-unit, 43,768-square-foot R-2 building. The project was developed by Rafel Salim with plans filed March 11, 2022 and it has not been permitted yet.

The neighborhood

In Long Island City, the bulk, or 33 percent of the 66.2 million square feet of commercial built space are residential elevator buildings, with industrial buildings next occupying 30 percent of the space. In sales, Long Island City has 4.2 times the average sales volume among other neighborhoods with $1.2 billion in sales volume in the last two years and is the highest in Queens. For development, Long Island City is the 2nd most active neighborhood among other neighborhoods. It had 9.2 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.

The borrower

The PincusCo database currently indicates that Yitzchok Katz owned at least 19 commercial properties with 147,132 square feet and a city-determined market value of $27.4 million. (Market value is typically about 50% of actual value.) The portfolio has $152.1 million in debt, with top three lenders as SCALE Lending, Slate Property Group, and Scale Lending respectively. Within the portfolio, the bulk, or 53 percent of the 147,132 square feet of built space are elevator properties, with specialty properties next occupying 15 percent of the space. The bulk, or 78 percent of the built space, is in Brooklyn, with Queens next at 22 percent of the space.

Surrounding

Within a 400-foot radius of 32-03 39th Avenue, PincusCo identified two commercial real estate items of interests occurred over the past 24 months.
Of those two items, one was in new building development. It was a new building permit application filed on March 11, 2022 for a 31,755-square-foot R-2 building with 41 residential units at 38-38 32nd Street.
One of those two items was a sale which Yitzchok Katz bought the 0-square-foot industrial (G7) on 39 Avenue for $9.5 million from AHRC New York City on June 16, 2022.

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