Mixed-use Queens building trades for $14M

Transaction is one of the largest single-property transactions so far in 2011 for borough
By Adam Fusfeld | August 17, 2011 04:25PM

alternate
text
Itzhaki Properties agent Ami Efrati and 96-02 37th Avenue (building credit: PropertyShark)

Long Island-based Benedict Realty Group closed on one of the largest building transactions in Queens this year last week, purchasing a mixed-use building in Jackson Heights for $14 million, according to Ami Efrati of Itzhaki Properties, who represented the buyer in the deal. Itzhaki’s Leonid Mizukovski represented the seller.

The 79,336-square-foot building at 96-02 37th Avenue on the corner of Junction Boulevard has 76 residential units, nine retail spaces and one office space within one block of the Junction Boulevard stop on the 7 subway train.

“The location is crucial — people pay more to live closer to transportation,” Efrati said. “It’s also a very stable neighborhood; Jackson Heights is very working class.”

The building is completely occupied, with mom-and-pop shops filling the ground-floor retail, a travel agency in the office space and rents averaging $890 per month, Efrati said. On the open market, those units could command as much as $1,200 per month, he added.

Only one property in Queens traded for more than $14 million in the second quarter of this year, according to a recent report by Massey Knakal Realty Services, and that was the 240-unit Monte Excelsior in Little Neck. According to the firm’s first-half report released in July, the average mixed-use building in Queens traded at a 7.87 percent cap rate with a 9.89 gross rent multiple.

Benedict, which owns about 800 apartments in Jackson Heights and 4,000 mostly middle-income units throughout the city, bought 96-02 37th Avenue at a 7.4 cap rate, and a 9.8 rent multiple. Benedict was not immediately available for comment.

The building had been on the market for about seven months, with Itzhaki broker Leonid Mizukovski. The original asking price was $15.5 million. Though there were several offers within range of Benedict’s $14 million closing, none surpassed $13.4 million, according to Efrati.

It was owned by an Asian landlord named Ben Wai, who operates under the name Junction Enterprises, that according to PropertyShark.com owns at least 10 other buildings, mostly in Flushing. Junction purchased the Jackson Heights property for $12.75 million in 2005, according to city records. Though the landlord did make improvements to the building, including adding three of the nine retail spaces, he told Efrati that he had trouble communicating with the tenants and managing the building. Wai was not available for comment until at least tomorrow afternoon.

Though the property doesn’t require the risk and extrapolated projections of coveted Manhattan properties, the near-guarantee of modest profits is attractive to some buyers.

“You have to work it,” Efrati said. “You’re not going to get profit right away, but everyone has a way of squeezing it out.”