A few years ago, owners of a Long Island City building converted it from a century-old warehouse to a modern office with floor-to-ceiling windows and large connected terraces. But they could not find tenants for its 171,000 square feet. Now they have cut a deal with New York City to house migrants there.
The city is opening a large-scale shelter for asylum seekers at 4711 Austell Place in the Queens neighborhood, according to Crain’s. The city announced its occupancy of the vacant office building on Wednesday, but didn’t specify if the shelter would take up the entire five-story property.
In a case of unfortunate timing, the owners converted the property in 2020 as the pandemic boosted industrial sites and sank office buildings. Since its conversion, the building, owned by an LLC based in New Jersey, has sat empty.
The property had been purchased by one of Normandy Real Estate Partners’ private funds. Columbia Property Trust acquired Normandy in 2019 and managed the Austell Place property on behalf of the fund for a time, but that ended when PIMCO took Columbia private and disposed of the legacy funds to a team led by former Normandy executives.
The Adams administration said the humanitarian relief center would initially welcome 330 single men. At full capacity, the property would host nearly 1,000 migrants.
Since last spring, more than 110,000 migrants have poured into New York City, a majority of whom remain in the city’s care, according to Deputy Mayor Anne Williams-Isom. The Long Island City property will become the 16th large-scale migrant shelter. There are more than 200 smaller, emergency shelters as well.
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The city did not immediately respond to a request for comment from The Real Deal about 4711 Austell Place.
As the migrant crisis escalates, the city is seeking space of all kinds to house asylum seekers. Several hotels decimated by the pandemic have been transformed into migrant centers, as have underutilized spaces such as Randalls Island and the Creedmoor Psychiatric Center in Queens.
Migrant shelters could benefit owners with few options for their properties. In the summer, the city leased the Roosevelt Hotel from the nation of Pakistan, agreeing to pay $220 million over three years.
The long-term effect on properties remains to be seen. Last month, Reza Merchant’s The Collective sold a hotel in Long Island City for $35.7 million — 38 percent below the purchase price from four years earlier — as the property is converted into a migrant shelter.
Correction: An earlier version of this story misstated the ownership of 4711 Austell Place.
— Holden Walter-Warner