Normandy, Drake Street refi LIC warehouse-to-office conversion with $75M Deutsche loan
Partners will use a portion of financing to complete leasing at 170K sf project
Normandy Real Estate Partners is moving ahead with the next phase of one of its warehouse-to-office redevelopments in Long Island City, where investors are looking to cash in on the spillover effect from Amazon’s planned move to the neighborhood.
Normandy, along with co-investor Drake Street Partners, scooped up a $75 million loan from Deutsche Bank to refinance the former printing plant they’re redeveloping at 47-11 Austell Place, representatives for the project told The Real Deal.
The five-year, floating-rate financing replaces existing debt on the property, and gives the sponsors additional finish leasing and complete the renovation from a “vacant industrial building into a highly coveted, best-in-class creative office asset,” said Newmark Knight Frank’s Dustin Stolly, who helped arrange the financing.
Normandy and Drake Street bought the 138,000-square-foot industrial building for $35 million in 2015 from Francis Greenburger’s Time Equities, which a year earlier had signed a 40,000-square-foot lease with Mitchell’s NY, a family owned company that delivers publications such as the New York Times, the Wall Street Journal and The Real Deal.
The taking rent in the seven-year deal was reportedly $20 per square foot.
The new owners financed the acquisition and first phases of construction with more than $35 million from SL Green Realty’s debt arm (which last year sold a piece to Pacific Western Bank) and overhauled the building into loft-style offices, adding an additional 32,000 square feet of new office space and amenities like a landscaped rooftop terrace.
Newmark’s Jordan Roeschlaub, who worked on the team alongside colleagues Nick Scribani and Chris Kramer to arrange the new financing, said the project is “well-positioned to capture incremental demand from Amazon’s commitment to Long Island City.”
The Austell Place development is one of several projects Normandy’s staked out over the past few years in Long Island City.
Just two blocks away, the New Jersey-based firm is working on a similar redevelopment of a warehouse at 25-11 49th Avenue, dubbed Gantry Point, which is another project it’s teamed up on with Drake Street. Earlier this year, the partners got an $81 million construction loan for the project, also from Deutsche Bank.
On the other side of Long Island City in the neighborhood’s Court Square section – closer to where Amazon will initially lease 1 million square feet at Savanna’s 1 Court Square office tower – Normandy last year paid about $54 million to buy a stake in Leon Kassabian’s Kassabian Realty’s 130,000-square-foot warehouse at 43-10 23rd Street. The owners are redeveloping the property into a 195,000-square-foot office building.