Innovo Property Group has received a $155 million construction loan for a proposed multi-story industrial development at 23-30 Borden Ave. in Long Island City, N.Y. An affiliate of Starwood Property Trust provided the debt for the upcoming 900,000-square-foot last-mile distribution center/warehouse project.
The New York City-based real estate investment and operating company founded by Andrew Chung picked up the property for $75 million in January 2019, along with investment partners Atalaya Capital Management and Nan Fung Group. Allianz backed the purchase with a $61 million loan, according to CommercialEdge.
The nearly 5-acre plot was formerly home to online grocer FreshDirect’s 276,705-square-foot vintage warehouse, already demolished by the current ownership. The new development calls for a five-story building with elevated truck courts and a vertical parking structure that allows for direct access to each level. Plans for the project were filed at the end of 2020, according to Commercial Observer.
Long Island’s industrial health
Innovo has been an active player within New York City since 2015, focusing on value-add projects in the outer boroughs. In late 2019, Innovo completed the recapitalization of an 830,000-square-foot mixed-use property in Queens through another joint venture with Hong-Kong-based Nan Fung.
It’s been more than two years since Amazon pulled out of its initial plan to build its HQ2 in Long Island City, and a year since the global health crisis began. The pandemic-driven e-commerce revolution catapulted industrial real estate into a new cluster of top-performing asset classes. In Long Island, vacancy rates fell to a record low of 4 percent in the last quarter of 2020, a recent Cushman & Wakefield report shows. Total available space fell to 5.2 million, with more than 1.4 million square feet of fresh supply is expected to deliver throughout 2021.