Developer Seeks Debt on New Queens Rentals
A Tishman Speyer partnership is on the hunt for a mortgage of up to $1 billion on a new upscale apartment complex in Queens, N.Y.
New York-based Tishman and its partners, including H&R REIT of Toronto, have provided preliminary information about the deal to lenders via HFF. The loan would be backed by the 1,871-unit Jackson Park property in the Long Island City neighborhood. While the full details haven’t been outlined yet, sources said the Tishman team is expected to seek quotes at multiple proceeds levels, ranging up to around $1 billion.
Jackson Park encompasses three glass-encased residential towers and a five-story clubhouse, adjacent to the Queens Plaza subway station. Tishman, H&R and an unidentified third investor began construction in early 2015. Near the end of that year, Bank of America and Wells Fargo led a $640 million loan to finance the development, which had a projected cost of $1.1 billion. The floating-rate debt carried an initial term of four-and-a-half years, plus two one-year extension options. Pricing was 250 bp over one-month Libor.
H&R said this week that the property is worth about $1.6 billion. The buildings opened in stages over the past year. The apartments are approximately 70% leased, with stabilization expected in the third quarter. Rents for currently available units range from just over $2,600 for a studio to nearly $6,000 for three bedrooms.
The complex has 120,000 square feet of amenity space, including the 45,000-sf clubhouse. There are two pools, a yoga and fitness center and a basketball court. Other features include a 1.6-acre private park, a bocce court, a dog park, grilling stations, a communal dining area, a demonstration kitchen and a fireside lounge. Each of the three buildings has a rooftop deck with views of the Manhattan skyline.
The buildings are on a two-block parcel on the south side of Jackson Avenue, bounded by Queens Boulevard, Orchard Street and a rail yard. One Jackson Park (42 stories) is at 30-02 Queens Boulevard, Two Jackson Park (53 stories) is at 28-34 Jackson Avenue and Three Jackson Park (44 stories) is at 28-10 Jackson Avenue.
Long Island City has seen heavy development over the past decade, and investor interest was heightened in November when Amazon announced plans to create one if its “HQ2” campuses there. But the online retail giant announced yesterday that it was canceling those plans because of local opposition to the large package of financial incentives the city and state had offered the company.
While Amazon’s withdrawal shouldn’t directly affect deals such as the financing of Jackson Park, it may dampen expectations of a large economic boost to Long Island City. In particular, it throws into question the outlook for One Court Square, a 1.5 million-sf office tower where Amazon was slated to move into some of the 1 million sf that Citigroup is vacating.
One Court Square is owned by New York fund operator Savanna and J.P. Morgan’s Junius Real Estate unit — which last month began marketing a stake of up to 90% in the 50-story building and talking to lenders about some $750 million to finance the recapitalization. The stake sale was expected to value the building at $900 million or more.