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Normandy Real Estate Partners Secures $81M for LIC Industrial Repositioning

Teams with Keystone Equities, Drake Street Partners to Redevelop 25-11 49th Street
February 15, 2018
Rendering of the proposed repositioning of 25-11 49th Avenue in Long Island City.
Courtesy of Normandy Real Estate Partners.

Long Island City, making headlines for its apartment construction boom, is also attracting the attention of office developers. Normandy Real Estate Partners, Keystone Equities and Drake Street have teamed on an office project they say is almost fully preleased.

Normandy Real Estate Partners has secured an $81 million loan from Deutsche Bank to acquire and reposition a two-story industrial warehouse located at 25-11 49th Ave. into an 11-story office building, according NKF Capital Markets, which arranged the financing on behalf of Normandy.

The development team has already broken ground on the project and it is expected complete by summer 2019, CoStar News can confirm.

The vacant, 135,000-square-foot, loft-style industrial asset, originally built in 1919, will expand vertically to span 238,000 square feet. Nine additional floors that are being built atop the existing property are already fully leased, according to sources with knowledge of the deal. The ownership team plans to market the remaining space to creative and TAMI tenants.

The repositioning will encompass a rooftop deck and outdoor amenity space in addition to the installation of new building systems including HVAC, safety and electrical. Larger windows will be installed, as well a new lobby, elevators and building entrances.

The Deutsche Bank loan was brokered by Jordan Roeschlaub and Dustin Stolly, vice chairmen and co-heads of debt and structured finance at NKF Capital Markets.

"This property is ideally located near main transportation hubs, which represent part of the growing appeal of this neighborhood," says Stolly, adding that he believes the sleek new building will provide its tenants an excellent opportunity to recruit and retain talent.

25-11 49th Ave. is located 0.2 miles east of the Hunterspoint Avenue Long Island Rail Road (LIRR) station, within the Northwest Queens submarket. Although the submarket is demonstrating strong employment fundamentals and an expanding resident base, landlords hoping to tap into the TAMI trend have driven up office vacancy. Northwest Queens’ office vacancy year-to-date sits at 13%, according to CoStar data. In 2017, it was 10.5%.

Nevertheless, CoStar market analysts say in the Northwest Queens Office Submarket Report that pricing for commercial properties, "continues to climb, as investors look to capitalize on the area’s shifting fundamentals."

Diana Bell, New York City Market Reporter  CoStar Group   
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