The Real Deal New York

Westbrook, Andrew Chung to buy LIC warehouse for $195M

Amid pending deal, NYCHA will say goodbye to paying $9 psf in rent

March 28, 2016 05:45PM

Ruby Schron

From left: Cammeby’s Ruby Schron and Westbrook’s Sush Torgalkar

UPDATED, March 29, 4:56 p.m.: The New York City Housing Authority’s bargain rent of $9 per square foot at a Long Island City warehouse appears to be coming to an end.

Westbrook Partners and investor Andrew Chung are in contract to buy the seven-story, 656,000-square-foot property at 23-02 49th Avenue for $195 million from investors Rubin Schron’s Cammeby’s International and the Fruchthandler family.

Chung, an alum of the Carlyle Group, also brokered the deal, which is expected to close in July, Crain’s reported.

NYCHA leases the building’s first five floors, which total 440,000 square feet, according to CoStar.

With the neighborhood’s commercial real estate market heating up, NYCHA could face a 400 percent rent hike when its lease is up in 2020, according to Crain’s.

Vornado Realty Trust and RXR Realty have made office moves in Long Island City. Hedge fund manager Daniel Loeb partnered with investment firm Brickman to redevelop a three-story, 150,000-square-foot property at 30-02 48th Avenue to attract TAMI and creative tenants.

The city’s Economic Development Corporation is also eyeing the neighborhood, putting out requests for proposal in February for two waterfront sites near Gantry Plaza State Park, with officials aiming at least 300,000 square feet of office space.

Earlier this month, Cammeby’s, Eli Fruchthandler and Bruce Federman closed on the sale of a 550,000-square-foot property south of the Brooklyn Navy Yard for $161 million to Westbrook and RXR Realty. The new owners plan to reposition that property as a new office destination for tech firms.

 

NYCHA said on Monday it has a $60 million deficit, according to Crain’s. The agency, which has had financial troubles, is moving forward with a controversial plan to build apartments on underutilized NYCHA land. NYCHA came under fire last year for selling off $18 million worth of unused supplies — housed at 23-02 49th Avenue — for a fraction of what they cost taxpayers.

On Tuesday, NYCHA disputed the potential 400 percent rent increase.

“The sale of the building should not affect NYCHA’s rent. According to the lease, our rent is fixed through the end of the lease term in 2020,” a spokesperson said in a statement. [Crain’s]Dusica Sue Malesevic

This post has been updated with a statement from NYCHA.

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