What’s a condo developer to do when a pandemic injects uncertainty into the market? One decided to go bigger in a neighborhood already inundated with residential projects.
Ascent Development has secured $48.2 million in new loans to construct a 130-unit condo building in Long Island City, according to financial documents recorded Monday.
That’s 30 percent more apartments than when Ascent first filed plans for the building in 2019.
“During the pandemic when everything slowed and financing became harder to find, we went back to the drawing board and added more units,” said Ascent principal Tien Vominh. The developer also added five floors to what had been a 20-story project.
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Construction of the building is underway at 45-30 Pearson Street. Ascent assembled the development site by buying eight properties over the past four years for $33.8 million, according to deed records.
But building more condos does not guarantee that people will buy them — at least not right away.
“We don’t see enough absorption in the market to start sales this year,” said Vominh. “We’re basically writing off the rest of 2021.”
Condo developers aim to start sales at a point when they will be strong enough to motivate prospective buyers to act quickly.
Vominh expects sales to begin in 2022 and units to be delivered in 2023. Los Angeles-based Preferred Bank is the lender and Marvel Architects is the architect of record.
Tom Zhidong Wu of development firm ZD Jasper co-signed the construction loans although Wu is not a typical development partner on the project, according to Vominh, who declined to elaborate. ZD Japser’s website says Wu moved to New York in 1991 and founded a computer company that sells and services PCs in the tri-state area. Wu’s firm referred questions to Ascent.
The new loans add to the $16 million already borrowed by limited liability company Pearson JV, which controls the project. Ascent filed its condo offering plan for the site in October 2019.
The building will be located across the street from the Wolkoff family’s 5Pointz, a 1.3 million-square-foot project where developer G&M Realty must pay graffiti artists millions of dollars for whitewashing their work on the iconic warehouse.
For years, Long Island City experienced rapid growth as new residential high-rises were built left and right, and even Amazon’s scrapping of its plans in 2019 to build a headquarters there did not slow the area’s momentum. But then Covid led renters to ditch their apartments and sent vacancy rates soaring.
As of last summer, nearly 60 percent of the 1,945 condo units completed in Long Island City since 2018 were unsold, according to real estate analytics firm Marketproof.
Vominh spoke to The Real Deal from Dallas, where the developer said of the Texas booming housing market: “It’s crazy down here.”
Corrections: This story has been revised to show that the project site was assembled over four years, not seven, and that the plans were changed to add five floors, not one.